FCA 'urgently' investigating misleading BSPS redress offers

The Financial Conduct Authority (FCA) is looking into reports of firms making unsolicited offers to former British Steel Pension Scheme (BSPS) members, warning that this could be a “deliberate attempt” to exclude former members from participating in its redress scheme.

In a statement, the FCA confirmed that it was aware of four firms associated with the British Steel Action Group that may be making unsolicited offers to former BSPS members who have not made complaints, stating that it is “urgently” looking into these cases.

The watchdog also raised concerns that such conduct may be a "deliberate attempt to exclude former members from participating in the scheme, binding them to receiving less money than they might be entitled to under the scheme".

“If substantiated this is wholly unacceptable and constitutes serious malpractice," the FCA stated.

"We are urgently looking into these cases and will consider taking action against any firm we find to be misleading consumers or making offers not calculated in line with our guidance."

The FCA also outlined its current expectations for firms, emphasising that it expects firms involved to treat customers "fairly" and to clearly explain the implications of accepting an offer before the redress scheme starts.

Indeed, according to the FCA, accepting an offer now could mean former members are not included in the scheme and will not receive the right amount of redress.

In light of this, the FCA said that if a former BSPS member has made a complaint to a firm and the firm decides that the advice was unsuitable, the firm should inform them that the redress methodology will change on 1 April 2023 and that they have the option to wait until then before the redress calculation is carried out.

It also confirmed that if former members do not take any action and do not reply to the offer, they will be included in the redress scheme, provided they are eligible.

Under the redress scheme, firms will be required to use the FCA's calculator when calculating redress if the advice was unsuitable, while consumers will also have the option to have this redress calculation checked by the Financial Ombudsman Service.

The FCA is also currently facing a legal challenge on its proposed BSPS redress scheme from the British Steel Action Group, although the FCA has pledged to defend the scheme “vigorously”, highlighting the legal challenge as an "attempt to delay the payment of redress".

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