Video case study flies in the face of ‘short-sighted’ industry criticism, shows the importance of Claims Management Companies
A victim of pension mis-selling has won his financial claims case through a claims management company having previously been rejected by the FSCS, calling into question the criticism of CMCs from the financial services industry.
In a video interview with Get Claims Advice, Roy who lives in Essex told how he was mis-sold his SIPP investments (Forestry and Student-halls schemes) for which he was unsuitable for, not fitting the criteria of a Sophisticated Investor or a High Net-Worth individual, with an adverse attitude to risk.
Shocked and worried following the liquidation of one of his investments, Roy began to become seriously concerned when his own investigations unveiled that his IFA had later gone into liquidation too, leaving no firm for the FOS to bring a case against.
The FOS naturally referred Roy to the FSCS, but after a month of filling in forms and an anxious 6-month wait Roy received the FSCS decision: his case had been rejected.
“I was devastated at the time, […] my hard earned years of work had all been taken away from me by some unknown people at the end of a telephone who promised me the earth”.
Fortunately for Roy, he was recommended Get Claims Advice by a third party, who reopened his case with the FSCS and resulted in a payout exceeding £48,000, allowing him to go part-time at work and theoretically retire 12 years earlier than his previous situation allowed.
The question this case has raised for the industry is therefore simple: Why does a CMC have to play such a crucial role in mis-sold pension compensation even when a victim goes to the FSCS?
In Roy’s own words, he described the FSCS forms as “at best, complex, at the worst confusing”.
Does this case highlight a paradox within the compensation process? If an investor is mis-sold their investment because they are not a sophisticated investor, how are they supposed to complete a process that requires a knowledge of investments and the way in which they are sold? If a trained and examined adviser is capable of mis-selling through negligence, how is an untrained client supposed to be able to prove this?
We believe this case is just one of the many that highlights the currently crucial role of CMCs in the compensation process.
In the worst cases (yet a daily occurrence) the victim of mis-selling is so far from the criteria for a sophisticated investor that not only do they not realise their investments are unregulated, but they often don’t know the name of their investment, where it is based or that they even had a SIPP.
How are these people supposed to claim their pension funds back without a CMC to first uncover the problem, and then provide vital knowledge and experience to facilitate the claim?
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Link to video playlist: https://www.youtube.com/playlist?list=PLZJ_R_CZukd08XPYrEFME_Zi6bxA-vFvF