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Lawyer claims watchdog shunning time-bar rule

The IFA Defence Union’s lawyer has accused the Fin- ancial Ombudsman Service of systematically ignoring an FSA rule time-barring endowment complaints against IFAs.

During a taped meeting with FSA managing director regulatory services David Kenmir and FSA chief counsel Greg Choyce, IFA Englands proprietor Andrew Kerr, who is the lawyer for the IFADU, pointed to a clause in the UK Limitation Act stating that proceedings for claims in negligence must be brought three years from the date when the complainant ought reasonably to have known they had cause for complaint.

Although this date is generally taken to be when a complainant received their first red projection letter, FSA’s dispute resolution rule 2.3.6 2b ensures the three-year period can start before this date if the firm can show the complainant ought reasonably to have known before then. Kerr says many consumers have been wrongly awarded compensation and that extensive work undertaken by the FSA to raise awareness of potential shortfalls should have alerted consumers to the problem before they got a red letter.

Although the FSA removed the exemption this year to ensure that only a red projection letter constitutes a sufficient warning, Kerr says the FOS cannot apply this rule retrospectively and the exemption should be applied to all endowment complaints currently with the FOS.

Kerr says: “The FOS is ignoring this rule. It does not have the power to apply its dis- cretion to disapply normal time bars and set its own jurisdiction.”

FOS spokeswoman Emma Parker says: “We will look at individual cases to see if specific information was sent to the consumer or the consumer otherwise showed he was aware that he had cause for complaint before the normal timetable. But, in keeping with the FSA’s rules, such findings are unusual and very much based on individual case circumstances.”


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‘Turner misrepresenting US thrift system figures’

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McCarthy says enforcement not top priority

FSA chairman Sir Callum McCarthy says the regulator will not make enforcement its number one priority and contrasts this with the hard-line stance of US regulator the SEC. Speaking at the CML annual conference this week, McCarthy contrasted SEC chairman Chris-topher Cox’s recent speech in Florida stating that enforcement was its top priority, with the […]

Capita set to make bid for Webline

Capita is thought to be lin- ing up a bid for IFA portal Webline to create a complete package of outsourcing for advisers. The outsourcing firm rec-ently acquired adviser back- office firm Quay and industry insiders believe that a move for the portal would fill in the gaps in Capita’s adviser offering. Webline executive chairman […]


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