Standard Life must compensate a client for failing to collect regular pension contributions from their bank account.
In order to help replenish the amount drawn down, Ms M wished to pay an extra £300 per month into the fund from her personal account.
Standard Life contacted Ms M to confirm the pension fund transfer, at which point it also told her the regular £300 payment she wished to make had been set up.
Ms M believed everything was in order, and that the regular payments would start being deducted from her account.
However it was not until she received an email in August 2017 about her electronic statements that she realised no contributions had been made for almost two years.
Ms M contacted Standard Life to query her statements and was told she had been sent two separate direct debit mandates back in 2015.
Yet these were never returned and Standard Life says it did not have the necessary authorisation to deduct the contributions from her account.
Ms M says she does not recall ever receiving the direct debit mandates, but was told over the phone that the regular payments had been set up.
Standard Life apologised to Ms M for the misleading information she was told over the phone in 2015, which it says was given in error.
It offered £200 compensation for the mistake but Ms M did not feel this was enough and argued that Standard Life should pay some of the backdated contributions into the fund on her behalf.
Standard Life declined to do this because although it accepts the mistake, it says that Ms M did not return the direct debit mandate, and should have realised the money was not being taken from her account.
The provider also argued Ms M was issued with yearly pension statements which would have shown she was not paying anything, and she has not actually lost the money as it was never debited from her account.
But Ms M says she no longer has the money as it was stolen from her and is not in a position to be able to make up the difference.
She also claims that she never received her annual statements until she logged into her account in 2017.
The FOS investigator says both parties ultimately had some share in what went wrong, and this should be reflected in any redress Ms M might be due.
In considering what Ms M had actually lost, the investigator felt a compromise would be for Standard Life to pay the growth that would have been attributed to one year’s worth of contributions at £300 per month – rather than the two year’s contributions Ms M claims to have lost.
Standard Life accepted that they had not got everything right, and Ms M acknowledged she was also partly liable for the mistake, so both parties agreed with the proposed settlement in principle.
On that basis, Standard Life offered to pay Ms M an additional £156.26 in lost growth, which only accounts for growth attributed up until August 2016.
The investigator agreed with this but Ms M rejected this as she felt it was too low, arguing that the amount should include growth up until now – which Standard Life declined to do.
As both parties were not able to agree on the nature of the settlement, the complaint was passed on to ombudsman Jack Ferris.
Ferris says the case contains a very particular set of circumstances and shared liability has made settlement difficult.
But Ferris rules Standard Life should pay for lost growth until the date of the decision and £200 it originally offered.
He adds the distinguishing point is even if Ms M discovered the shortfall through her statements, she would not be able to make it up as she lost a lot of money through fraud.
A Standard Life spokeswoman says: “We will be writing to our customer in full support of the ombudsman’s decision.”