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FOS hit by rising pensions complaints as PPI cases soar

by Michelle Abrego on Jan 29, 2013 at 07:55

FOS hit by rising pensions complaints as PPI cases soar

The number of complaints made to the Financial Ombudsman Services (FOS) in relation to pension products has risen over the last nine months.

Figures for the first three quarters of the Ombudsman's year, which runs from April 2012 to April 2013, reveal that complaints in relation to annuities, Sipps, personal pensions, and pension transfers all increased compared to the first three quarters of 2011/12.

The FOS saw a 26% increase in Sipp complaints, receiving 455 complaints, up from 360 in the equivalent period last year, with 58% of these being upheld in the consumer’s favour.

Complaints on annuities went up 20% from 439 in the year to date, from 363 in 2011/12, but only 27% were upheld.

There were 1,537 complaints related to personal pensions, a 17% increase compared to the 1,303 made at this point last year, with 33% of cases upheld by the FOS.

Occupational pension transfers and opt-outs complaints increased 17%; the Ombudsman received 226 complaints in comparison to 197 from this time last year.

Overall, the FOS, headed by chief executive Natalie Ceeney (pictured), received more complaints in the period between October and December 2012 than in any year between 2000 and 2010. The total number of new complaints was at 180,679.

Payment protection insurance (PPI) complaints continued to dominate, with the FOS resolving 244,873 complaints in the period up to December 2012. The Ombudsman said it was currently taking on between 8,000 and 10,000 PPI complaints each week and expected to receive over 350,00 complaints this year.

12 comments so far. Why not have your say?


Jan 29, 2013 at 08:51

This was another accident waiting to happen. Again, they were warned when people lost generous GARs (often for a 'wider range of funds'), and many others were recommended to forfeit defined benefits for promised growth rates that have been nowhere near achieved.

I am not surprised by this, other than it has taken quite so long.

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Richard Anderson

Jan 29, 2013 at 08:52

Looking at those figures, it appears to me that investment-related complaints totalled about 2,700 over the year. That is too many unhappy clients, BUT, compare that to PPI claims running at an average of 9,000 PER WEEK. And the banks used to be such moral bastions ....

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Charles Rickards

Jan 29, 2013 at 09:10

I am not surprised by an increase in claims across the board, with the constant bombardment of consumers by claims handling companies. It does make you wonder how many claims are made by chancers, trying to improve their own economic position. In my opinion, there should be some kind of mechanism to discourage spurious claims. May be the claimant should be presented for the FOS cost, if the claim fails.

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Kate Brookes

Jan 29, 2013 at 09:25

Exactly, I agree with Richard.

My guess is that the pensions, particularly the occupational ones, are only being complained about now because people are coming up to retirement age. This means that bad advice probably given in the long distant past is now coming home to roost, and will take a while to work it's way out of the system. I have a hunch that these types of complaint would not occur in this day and age, with increased levels of compliance. I can just see any adviser trying to get those types of transfers mentioned by Anataki past our compliance bods, it just wouldn't happen, unless there were very exceptional and unusual circumstances.

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Gloaters_r_us via mobile

Jan 29, 2013 at 09:29

@ Anitaki gosh were you Nostradamas in your previous life.. So much insight i am in complete awe... You need to get out more.. The world really is a beautiful place..

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Julian Stevens

Jan 29, 2013 at 09:38

Nearly a quarter of a million complaints about PPI that haven't been resolved satisfactorily (hence their referral to the FOS) suggests that either:-

1. the FSA has failed to get the primary (mis-)sellers of those products to improve their complaints handling procedures (which I'd understood to be one of its priorities) or

2. the CMC vultures are still as busy as ever encouraging all and sundry to complain, however justified or otherwise their complaint may be. What's the latest data on how many of them have been shut down by the MoJ? From the way in which the FSA is continuing its relentless persecution of the IFA sector, you'd think it was us who are being shut down by the boatload for bad practices and therefore in need of greater regulatory attention.

As for all the complaints about other classes of business, once again it would be useful to know the proportions attributable to various distribution channels, notably IFA's. Why does CityWire never provide this information?

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Bob Donaldson

Jan 29, 2013 at 09:42

You only need to look at the figures for SIPP complaints 455 with 58% being upheld by FOS. This one falls fairly and squarely at the independent sectors door and I will bet you most of the complaints are UCIS related.

Interesting wht Kate Brookes has stated about the 'long distant past' perhaps this is why we will never get a long stop.

With regards to the point by Charles Rikards their are a lot of chancers out there looking at the way to make a quick buck, however the simple thing is not to deal with them. Surely it is better to lose a client than get embroiled in something which later on down the line is going to cost you more than any commission/fee you are paid.

Surely there are enough potential clients out there to avoid such pitfalls and spurious business.

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Jan 29, 2013 at 09:55

@ Gloaters

No, l'm not Nostradamus, but neither am l blind to the obvious. Could you really not see this coming? If you didn't, should you be giving any advice as to what might happen to various fund sectors in the future? After all this was as certain to happen as night follows day.

What was also obvious is that a lot of the "pension consolidation experts" involved in this business, have left the industry within the last 12 months, or, are now working from an overseas base. ........and that seems to have happened too.

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Jan 29, 2013 at 10:38

I agree with Anitaki, this was bound to happen for two main reasons:

1 The introduction of Stakeholder following the Turner Report effectively took a huge number of advisers out of the pension market for some 10 years. For people with small pension pots, the rules encouraging Stakeholder sales did them a misservice as they no longer were offerred advice and their pensions stuck in poorly performing investments, more often than not With Profits. Now they are reaching the time when they maybe able to take a lump sum, they find the extra charges some firms levied on small pots made the promises they felt were made when they purchased the plan, worthless.

2 The unchecked growth of SIPPs invested in UCIS, promoted by fraudsters to enrich their own back pocket, with scant regard for the welfare of the client. People who describe themselves as IFAs who facilitated this godawful mess should be jailed. The reliance on lawyers to argue that they were acting within the rules and no blame can be inferred is, frankly, disgraceful. This is not to say the promotors of these failed UCIS should not also be sent to jail. The sorry mess will be paid for by the honest part of the IFA community, like always.

Whose should take the lions share of the blame? The FSA. They fiddled while Rome burned, not taking action against miscreants, blaming their own powers and the need for undisputable proof before taking any action. Over-reliance of tick boxes to check advice, systems and control meant an overview of market abuses was not undertaken with any enthusiasm.

We are now quoting the misselling of PPI by the banks as a good example of how uncaring the banks were of their customers needs. This is not a good example. Most PPI was 'missold' following a review of paperwork, with multiple examples of incomplete tick boxes and a misunderstanding of the rules of engagement. But how many of the purchasers of PPI could not benefit? Most were borrowing money and had no means of repaying if redundancy or sickness stopped income. Granted the self employed had little chance of claiming and should have been pointed out the shortcomings of the policy, but everyone seems to be able to get compensation regardless of their needs. This is a great example of rules taking over from commonsense. The FSA was to blame.

The abuse of private pensions by a number of immoral advisers, providors and conmen is a far greater scandal, but some 5 years later the FSA is only just waking up with the transition to the FCA. The wrecking and mistrust of pensions for the bulk of the UK working population started with the Turner report, the same Lord Turner of the FSA, and resulted in a huge reduction of saving for retirement, eventually leading to forced Auto Enrolement. How many increased complaints can be traced back to the ill-informed Turner Report?

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Ewart Matthias

Jan 29, 2013 at 10:52

@Bob Donaldson

Sorry to disappoint you Bob but this doesn't fall squarely at the IFA's door as many if not most SIPP transfers are carried out by non-regulated firms as SIPPS with many investing in overseas property and is a non-regulated activity (as yet anyway), another outstanding failure by the FSA.

I recently have had to pay £500 for a complaint that should never have gone to the company let alone the FOS and was thrown out as unfounded. This means I have more or less done the work originally for nothing. If treating ALL fairly should be the key (and I don't see why we shouldn't be) then unfounded cases should be paid for at the very least by any CMC or if direct, from the client.

Seems to me that CMC companies have a no lose case and are trading unfettered on the misery of advisers.

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Mr Man

Jan 29, 2013 at 12:28

UK regulation is a mess and astute advisers are dealing in non regulated trades within or outside the UK. Catch up FSA if you can...Actually you never will. Ha ha. Complaints are encouraged by the FOS and FSA and why not. Pretty much every piece of historical advice can be unpicked and regraded as mis-selling if the FSA so wish. I bet if I were to "whistle blow " any of the above contributors to this thread that I can identify you would all get a kicking if the FSA looked you over. Be afraid...be very afraid "fear the FSA"

All UK regulated advisers who remain as such are suckers.Fines and complaints against you will continue. Get your life back, stop looking over your shoulder and sell unregulated products.

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Nick Bamford

Jan 29, 2013 at 13:14

FOS will not find against any IFA who has recommended a SIPP and invested in an unregulated collective investment scheme which is property based. I know this because the following is a direct lift from a FOS letter to a Cautious, inexperienced investor whose adviser recommended a £98,000 investment from her SIPP into such a fund (current value £26,000)

"I do not find any material difference between the merits of an unregulated offshore property fund and those of a regulated onshore fund"

We should be "very afraid" ignorance is actually a virtue if you work for FOS

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