Sipp firm Carey Pensions has defended settlement payments it made to investors after the BBC reported claims it was encouraging clients to abandon Financial Ombudsman Service (FOS) complaints relating to an unregulated investment scheme.
The BBC You and Yours programme reported that the FOS is considering 77 claims against Carey Pensions and 24 provisional decisions have been made ruling in favour of the client and against the Sipp firm.
A FOS spokeswoman added 'our investigations are ongoing and we haven’t issued any final decisions'.
These rulings concern the due diligence carried out by Carey Pensions on the unregulated introducer, which was selling investments in an unregulated investment scheme investing in Store First storage pods.
The BBC report also said the Financial Services Authority, predecessor to the Financial Conduct Authority, had previously issued a warning about one of the introducers involved in passing business to Carey Pensions.
Carey Pensions has been offering some of these investors settlement offers lower than the expected FOS compensation payouts.
One investor told You and Yours that Carey Pensions’ solicitors sent him a letter trying to convince him to settle.
Earlier in the year the Sipp firm reported a loss of f £153,800 in 2016 due to complaints and legal cases. The firm’s chief executive Christine Hallett confirmed these legal cases relate to the settlement cases.
Hallett said her firm has offered settlements to ‘resolve some members’ complaints on a confidential basis with no admission of liability’.
‘Any offers were made taking into account the individual’s circumstances and were presented in an open, honest, fair and reasonable manner,’ Hallett said.
‘The FOS has visibility of all ongoing complaints against Carey dealt with by its service, including any settlement offers made for complaints presently before FOS. We are aware that the FOS has been in dialogue with a number of members in respect of the offers we have made.’
Hallett said she ‘fundamentally disagrees with some of the findings of the FOS’ provisional decisions’.
New Model Adviser® asked Hallett why she was not appealing the decisions rather than paying settlements.
‘We are appealing but that is running in tandem and that could go on for a long time,’ she said. ‘We have made a decision to try and be fair and reasonable to the client. At the end of the day we are doing things with our legal advice and PI insurance advice.’
A spokeswoman from the FOS said: ‘If we’re made aware that a firm is seeking to bypass us to make offers, and especially if they are offering consumers less than we have or might recommend, we’ll refer them to the regulator.’
The FCA declined to comment.