Pension victims still waiting for compensation
Friday 21 February 1997
The Personal Investment Authority (PIA), the financial regulator, yesterday said the number of people compensated was up from the 4,000 or so dealt with by September last year.
A PIA spokesman said: "Whilst the figures indicate that the pace of the review remains too slow, they do not take account of the measures announced in November last year to speed the process up."
He said that while many companies were proceeding with reviews of pension transfer cases faster than before, some were dragging their heels. Disciplinary action against the laggards was a strong possibility, the spokesman said.
The PIA's latest statistics come more than two years after the senior City regulator, the Securities and Investments Board, issued a report showing that up to 1.5 million people may have been mis-sold a personal pension. However, a PIA deadline for all urgent cases to be dealt with by December 1995 collapsed in acrimony as the regulator was forced into a climb-down with its members over the letters they sent to potential victims. The PIA also had to wait months until a critical court case was resolved with independent financial advisers.
Last October, a PIA memo leaked to The Independent showed some companies with tens of thousands of cases on their books had barely dealt with more than a handful.
Since then, the PIA has tried to adopt a new get-tough approach, calling in executives from the worst-offending companies and insisting they resolve 90 per cent of their cases by the end of this year.
Of the total cases identified as priorities, 361,000 came from life companies and 64,000 from the insurance arms of big banks and building societies. Financial advisers have contributed about 53,000 cases. Of this last group, compensation has been offered to only 305 people.
A Prudential spokesman said yesterday: "We have made considerable progress in the past few months and have cleared the majority of cases as not requiring compensation.
"We are now working through the cases we have identified as needing review as quickly as possible."
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