FCA forces firms to stop making misleading BSPS offers

The FCA has formally required two firms to stop making unsolicited settlement offers to former members of the British Steel Pension Scheme (BSPS) who are likely to be part of the redress scheme it has established.

The FCA recently warned that several firms are making unsolicited offers to former BSPS members who have not made complaints.

Under the regulator's redress scheme, firms will have to review the advice they gave and pay redress to those who lost money because the advice was unsuitable.

The FCA says it is concerned that the unsolicited settlement offers, which are likely to be for less money than they are entitled to under the redress scheme, are a "deliberate attempt to exclude former BSPS members from the redress scheme".

The FCA has now formally required two firms, Abbey Lane Financial Associates and Estate Capital Financial Management, to stop making these offers. Abbey Lane made offers of £100 to 82% of its clients who were BSPS members and Estate Capital made offers of £300 to 83% of its former BSPS members.

The FCA said: "We are concerned that these offers are significantly misaligned with the average calculated redress of £45,000 for former BSPS members who received unsuitable pension transfer advice."

Firms offering unsolicited offers will be forced to withdraw any existing settlement offers currently pending any consumer agreement, treat any pending settlement offers as withdrawn, and cease making any further offers to former BSPS members who have not made complaints.

The firms will be required to apply the redress scheme to consumers who have accepted these offers in the same way they must for consumers who have not accepted offers.

The FCA added: "We will not tolerate this behaviour and we will take further firm action to put a stop to this sharp practice as needed."