New pensions row faces PIA
Monday 15 January 1996
A furious row has broken out between the Consumers' Association and a leading financial services regulator over a deal which risks leaving tens of thousands of victims of the pension transfer scandal without compensation.
The consumer watchdog has accused the regulator, the Personal Investment Authority, of watering down its instructions to financial advisers involved in mis-selling personal pensions.
The row, over letters advisers must send out to clients who might have been given bad advice, will drag in Treasury ministers. They have backed the new agreement, announced on Friday, between the regulator and specialist insurers.
Professional indemnity insurers, who will foot most of the compensation bill for pensions mis-selling, have waged a bitter campaign against the original form of the letters because they stated that victims had a right of redress. This opposition sparked a mass boycott by financial advisers of the pensions review first ordered by the regulator nine months ago. After months of talks, the PIA gave way to insurers last week, and removed any reference to compensation from the letters.
The Consumers' Association yesterday attacked the deal as a climbdown that would lead to far fewer victims having their cases reviewed to see if they are entitled to any compensation.
Philip Telford, a senior researcher in the CA's money policy group, said: "We are keen to see any blockage cleared.... but we would also be very disappointed at any weakening of the original review letter. The reality is that many people do not respond to these letters even when prompted. Taking away the part about compensation removes an incentive for them to do so.
"One must also ask why it is that the PIA has changed what must clearly have been its preferred letter. If the wording was right in the first instance, why is it not so now? There seems no doubt that [the PIA] backed down under the instructions of the insurers."
The PIA claimed its change of mind broke the logjam preventing hundreds of thousands of urgent cases from being reviewed. Joe Palmer, PIA chairman, said: "I am very pleased that constructive discussions with a number of leading insurers will enable the review process to go ahead."
The insurers had argued that to send letters telling people they might be entitled to compensation meant inviting claims against themselves. They feared paying out hundreds of millions of pounds in compensationand threatened that if the original letters were sent out they would refuse to foot the bill.
- 1 Katie Hopkins attacked me on Twitter — so I reported her to the police for inciting racial hatred
- 2 Martha Stewart accuses Snoop Dogg of 'smoking for four hours' during Justin Bieber Roast
- 3 I might be an MP, but that doesn't stop me fighting sexism with my breasts
- 4 Google April Fools': company unveils backwards search engine and huggable digital assistant
- 5 April Fools' Day 2015: The best hoax news stories from around the internet
University of Cambridge: Remains of 1,300 scholars are found under building
April Fools' Day 2015: The best hoax news stories from around the internet
April Fools' Day 2015 live: The best pranks and fake stories from around the world
Turkey power cut: Prime Minister says nationwide blackout could be caused by terrorists
Jeremy Clarkson 'could be given minder' ahead of a potential Top Gear return
Ukip supporters are 55 or older, white and socially conservative, finds British Social Attitudes Report
Street preacher quoting from the Bible fined for calling homosexuality an 'abomination'
Katie Hopkins attacked me on Twitter — so I reported her to the police for inciting racial hatred
Woman filmed launching racist tirade against men on the Tube for speaking in 'own lingo'
The West has it totally wrong on Lee Kuan Yew
David Cameron calls Labour 'hopeless, sneering socialists' while announcing 7-day NHS plans
iJobs Money & Business
£20000 per annum + commission: SThree: Sthree have an exciting opportunity for...
£18000 - £32000 per annum: Recruitment Genius: A Telesales Executive is requir...
£45000 - £50000 per annum + benefits : Ashdown Group: A highly successful, glo...
£50,000 - £55,000: Neil Pavier: Are you a professionally qualified commercial ...