The FSA also found that the firm had failed to notify customers of charges deducted from their funds.
In a supervisory notice, dating from July 2008 but only published recently, the FSA says: “We have concluded to exercise the power to vary your permission in order to protect the interests of consumers or potential consumers.”
The regulator criticises Freedom for transferring customers into a new bank account without informing them that they would lose the right to authorise future transfers.
The FSA also cites a charge of £8,284 which was apparently levied against a customer without notification, for work it found no evidence had been completed.
Freedom Sipp was found to have allowed loans from clients’ funds that are not permissible under HM Revenue & Customs’ rules, although Freedom denies this.
The FSA states: “Your actions may have led and may lead in the future to consumer detriment, in that members’ money may be drawn upon from the scheme funds for unauthorised purposes.”
The company closed to new business in September last year before a second supervisory notice from the FSA rejected Freedom’s representations and reaffirmed the regulator’s stance.
Freedom Sipp partner John Quarrell says: “I do not know if we will open again to new business. The regulator took all our files and returned them but this mess is still ongoing.”