A lawyer has raised concerns that valid claims could be rejected after the Financial Services Compensation Scheme wrote to claimants reminding them they do not need a representative.
Money Marketing has seen a letter from the FSCS to customers of Heritage Pensions, which was appointed as the new operator for Brooklands Trustees in 2016. The lifeboat fund declared Brooklands Trustees in default last week.
The letter tells the customers they might be eligible to claim because Brooklands Trustees did not carry out proper due diligence when it accepted their pension transfer.
The letter details what the FSCS does and how it works. It says: “The service we offer is free and we do not charge individual consumers for dealing with claims. You will be able to apply direct and do not need to use any representative or claims management company to whom fees may be payable from any compensation due to you.”
Lawyer Alasdair Sampson is concerned the FSCS is telling claimants they do not need to use a representative when making their claim. He acknowledges it is correct in telling claimants this, but is worried clients might have their claims rejected because they are not aware of the specific legal issues.
He says: “I have lost count of the number of cases which were either made by the client directly, or by a solicitor who should have known better, and which were refused by FSCS and which were then upheld on review when I submitted further argument supported by documents.”
Sampson adds: “In the case of claims against Sipps, I am concerned that FSCS says that the claimant doesn’t need to use a claims manager or solicitor, which is perfectly correct, but simultaneously omit to make any mention of the particular legal issues and difficulties that can and may arise with claims against SIPPs which the lay claimant will simply not know about and cannot really ever be expected to know about.”
He says: “It strikes me that the FSCS inviting such claims is cosmetic to make them look good – so they can be seen as actively supporting the investing public but all the time knowing that these claims may well be rejected because they have not been prepared, presented and argued correctly.”
The FSCS declared Brooklands Trustees, Stadia Trustees, and Montpelier Pension Administration Services in default last week.
The lifeboat fund has received around 150 claims for compensation relating to the three businesses. Those claims relate to how the businesses set up, operated and administered Sipps through which people invested in storage pods, oil fields, diamonds and overseas property
The FSCS has been contacted for a response.