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PwC uses debt collectors to chase BIA cash

PricewaterhouseCoopers is using a debt collection company to chase former members of collapsed network Berkeley Independent Advisers for misselling liabilities.

Berkeley Independent Advisers was a subsidiary of Berkeley Berry Birch, which went into administration in March 2006. PwC was appointed as the administrators.

One letter, seen by Money Marketing, was sent by debt collectors Financial Service Recoveries to a former BIA member demanding payment of more than £500,000. It does not give any details about the reason that the money is owed.

A PwC spokeswoman confirmed that it has contracted Financial Services Recoveries to recover money from former BIA members.

She says: “We are claiming back those amounts paid out by the FSCS in compensation on policies considered negligent or missold.”

PwC refused to confirm how many former BIA firms it is chasing for recoveries or what total amount remains outstanding.

The Financial Services Compensation Scheme has paid out £4.5m for BBB in total so far but says it is still paying claims and seeking further recoveries.

The FSCS says it cannot disclose how much compensation has been paid out on behalf of former BIA members.

Tenet bought the contracts for the remaining BIA advisers and for the pipeline business, which protected advisers’ income and accepted liability for clawbacks, just before BIA went into administration.

Liabilities for past business remained with BIA and was passed on to the liquidators.

Tenet group distribution and development director Keith Richards says: “These letters must be going out to firms that left BIA before Tenet bought out the contracts. Advisers that moved across to Tenet are not liable for past business and if they receive a letter demanding money, they should contact Tenet immediately.”

Compliance consultant Adam Samuel describes the letter as “extraordinary”.

He says: “It is extraordinary because it demands an extremely large sum of money without the slightest indication of the basis on which the money is being demanded.”

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Comments

There are 5 comments at the moment, we would love to hear your opinion too.

  1. Although many staff, network members and outside industry individuals questionned the apparent financial/moral irregularities in the way BIA was run by its Chairman prior to administration, as the BIA members were in a Network, surely the liability for any funds being repaid sits not with them but with the Network and it’s directors. the advisers concerned may have indeed been “negligent” or “mis-selling” but doesnt the Network hold the responsibility

  2. There is something seriously wrong here, the individual amounts in these claims are in excess of £100,000, the FSCS pays out a maximum of £48,000, is there some profiteering involved?

    I have suggested that the FSA investigate as soon as possible because to my mind the Proceeds of Crime Act may come into play.

  3. Misselling liabilities as determined by whom and at whose behest?

    It would seem to me extremely unwise to join any company as an adviser if the terms of your engagement make you personally liable for all and any advice given as a respresentative of that company. What kind of deal is it if the company says we’ll take half (or whatever) of all remuneration you generate as a representative acting on our behalf but if anything should be found amiss at a later date, then you’ll be 100% liable. No one in their right mind would sign up to that sort of deal.

    Doubtless these latest victims will be checking very carefully their contracts of engagement.

  4. There is something seriously wrong here, the individual amounts in these claims are in excess of £100,000, the FSCS pays out a maximum of £48,000, is there some profiteering involved?

    I have suggested that the FSA investigate as soon as possible because to my mind the Proceeds of Crime Act may come into play.

  5. Past Directors of defunct IFA Networks all seem to adopt a favourite new occupation- as MAGICIANS! their best trick is a ‘DISAPPEARING ACT’.

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