PIA gets tough on pension scandal

The Personal Investment Authority, the financial services regulator, yesterday warned thousands of its members that they face disciplinary action if they fail to deliver quick compensation to victims of the pension transfer scandal.

The warning came as the PIA admitted that out of almost 400,000 so-called priority cases which should have been dealt with by the end of last year, just 7,000 investors have been offered redress.

About 6,000 of those offers came from independent financial advisers. Big insurers, banks and building societies who have 270,000 priority cases between them, had only offered redress in 1,000 instances.

Joe Palmer, chairman of the PIA, said yesterday: "[We] will not allow the situation to drift. Firms which are found not to be devoting sufficient time and resources to the review will be disciplined. The penalties will match their failure.

"We know that there have been delays to the review process which are outside our control. But it is clear that progress is not as good in some cases as it should be."

A PIA spokesman added that likely disciplinary action included fines, or even suspension from trading where necessary.

Mr Palmer's comments follow the first reports to the PIA by members of the progress reached in the pension transfer review at the end of December last year. The review, initially ordered by the Securities and Investments Board, followed an investigation which showed that up to 1.5 million people might have been mis-sold a pension.

The reports show that of nearly 1.1 million cases so far indentified as requiring investigation, more than 390,000 are classed as priorities, higher than original estimates.

As well as insurers, big banks and building societies contributed more than 60,000 of those cases, compared with 16,000 from large independent financial advice firms with a national network of offices, and 43,000 from small IFAs.

The PIA set 31 December last year as the target date by which the vast majority of priority cases, then thought to number about 350,000, had to be reviewed.

Among cases deemed urgent are those where a pension plan holder is dead or close to retirement, or where a person was wrongly advised to opt out of an occupational scheme while still in that company's employment.

Despite the regulator's hopes, the review became rapidly bogged down in a series of lengthy delays, caused by legal action, computer problems and threats by specialist insurers to invalidate the cover of advisers who sent out letters referring to compensation.

Separately, the Investors Compensation Scheme, the safety net for victims of fraud and bad advice, declared seven investment firms in default which could trigger potential compensations claims worth millions of pounds.

The claims expected are the first to be linked to the pension transfer scandal. The companies affected are: Cameron Law & Co, in Birmingham; Du Bara Investments, in Carmarthen, Dyfed; Homer MacKenzie, in Milton Keynes; Individual Savings & Insurance Services, in Reigate; Langley Financial Planning, in Langley, Berkshire; Scott & Scott Financial Services in Edinburgh; Stephen Welsh & Co, in Plymouth.

Start your day with The Independent, sign up for daily news emails
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Editor-in-chief - Financial Services - City, London

£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Guru Careers: Management Accountant

£27 - 35k + Bonus + Benefits: Guru Careers: A Management Accountant is needed ...

Guru Careers: Project Manager / Business Analyst

£40-50k + Benefits.: Guru Careers: A Project Manager / Business Analyst is nee...

Day In a Page

General Election 2015: ‘We will not sit down with Nicola Sturgeon’, says Ed Balls

'We will not sit down with Nicola Sturgeon'

In an exclusive interview, Ed Balls says he won't negotiate his first Budget with SNP MPs - even if Labour need their votes to secure its passage
VE Day 70th anniversary: How ordinary Britons celebrated the end of war in Europe

How ordinary Britons celebrated VE Day

Our perception of VE Day usually involves crowds of giddy Britons casting off the shackles of war with gay abandon. The truth was more nuanced
They came in with William Caxton's printing press, but typefaces still matter in the digital age

Typefaces still matter in the digital age

A new typeface once took years to create, now thousands are available at the click of a drop-down menu. So why do most of us still rely on the old classics, asks Meg Carter?
Discovery of 'missing link' between the two main life-forms on Earth could explain evolution of animals, say scientists

'Missing link' between Earth's two life-forms found

New microbial species tells us something about our dark past, say scientists
The Pan Am Experience is a 'flight' back to the 1970s that never takes off - at least, not literally

Pan Am Experience: A 'flight' back to the 70s

Tim Walker checks in and checks out a four-hour journey with a difference
Humans aren't alone in indulging in politics - it's everywhere in the animal world

Humans aren't alone in indulging in politics

Voting, mutual back-scratching, coups and charismatic leaders - it's everywhere in the animal world
Ronald McDonald the muse? Why Banksy, Ron English and Keith Coventry are lovin' Maccy D's

Ronald McDonald the muse

A new wave of artists is taking inspiration from the fast food chain
13 best picnic blankets

13 best picnic blankets

Dine al fresco without the grass stains and damp bottoms with something from our pick of picnic rugs
General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

On the margins

From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'
Sarah Lucas is the perfect artist to represent Britain at the Venice Biennale

Flesh in Venice

Sarah Lucas has filled the British pavilion at the Venice Biennale with slinky cats and casts of her female friends' private parts. It makes you proud to be a woman, says Karen Wright
11 best anti-ageing day creams

11 best anti-ageing day creams

Slow down the ageing process with one of these high-performance, hardworking anti-agers
Juventus 2 Real Madrid 1: Five things we learnt, including Iker Casillas is past it and Carlos Tevez remains effective

Juventus vs Real Madrid

Five things we learnt from the Italian's Champions League first leg win over the Spanish giants