High Court shuts down Fast Pensions following Insolvency Service investigation

The High Court has wound up Fast Pensions Ltd, along with five related firms, following an investigation by the Insolvency Service.

In total Fast Pensions and the other five companies, FP Scheme Trustees Ltd, Blu Debt Management Ltd, Blu Financial Services Ltd, Blu Personal Finance Ltd, Umbrella Loans Ltd, were responsible for 15 pension schemes.

The Official Receiver has made an application to The Pensions Regulator for the appointment of an independent trustee to take over the running of the pension schemes and it is anticipated that the application will take four to six weeks to complete.

Until the application is completed the Official Receiver will continue to act as the trustee to the pension schemes. In doing so it will take steps to protect the investments and assets in the pension schemes, will not make investment decisions during the period of appointment, is unable to provide updates regarding an individual’s pension, or to authorise transfers out of the schemes, or to make any payments out of the schemes, including death benefits and is unable to provide advice to pension members regarding their pensions.

The High Court wound up the companies yesterday, 30 May 2018, “in the public interest” and the Official Receiver in the Public Interest Unit (North) is now the liquidator of all six companies. The Insolvency Service revealed that between 2012 and 2013, 520 people were encouraged to transfer their pension savings from existing providers into one of 15 schemes, with Fast Pensions acting as the sponsoring employer.

FP Scheme Trustees Ltd (FPST) was the trustee of all 15 pension schemes and a proportion of the funds were invested in the remaining four related finance companies. The Insolvency Service was made aware of complaints about the management and operation of the companies and following an investigation, the High Court ordered that Fast Pensions and the five related companies be put into provisional liquidation in March 2018 following a petition presented by the Secretary of State.

Investigations found that a total of at least £21m was invested into the 15 schemes and people were persuaded to transfer their savings through various methods. Some received cold calls questioning the performance of their pension funds or offering free pension reviews, the Insolvency Service said. Others who were originally looking for credit were advised by the connected finance companies that they could get a loan if they transferred their pension savings to one of Fast Pensions’ schemes.

During the investigation the Insolvency Service found that advice provided was inadequate as the companies misrepresented the schemes on offer. Advisers also failed to disclose information around returns and the high risk and illiquid nature of the investments made by the schemes, as well as the benefits members would be entitled to.

Scheme members were also informed that the investments would consist of a wide ranging portfolio but investigators found that funds were misused. At least £4m was used to pay commissions and the remaining funds were largely used to make loans to companies and other entities which appear to be connected with Fast Pensions and FPST.

The six companies failed to preserve, maintain or produce adequate accounting records and failed to cooperate fully with the investigation. This made it impossible for investigators to determine the full extent of the companies’ activities, the nature and value of the investments made or the value of the members’ pension funds.

Commenting, Insolvency Service chief investigator David Hope said: “People work long and hard to put money away for their retirements but the six companies that have been shut down paid scant regard to their members. They used unsavory tactics to attract members and failed to paint the full picture as to what would really happen with their savings. By shutting the companies down, the courts have put a stop to their unscrupulous activities and we hope this sends a strong message that we will robustly investigate and take action where people’s funds and savings are at risk.

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