HM Treasury News Release
117/97 7 October 1997
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HELEN LIDDELL MEETS VICTIMS OF MIS-SELLING
Two victims of personal pensions mis-selling today met with
the Economic Secretary, Helen Liddell to discuss their cases.
Stella Gardner, a home care officer from Poole,Dorset and
Christine Culbert, a school administrative assistant from
London told the Minister about their experiences of trying to
get redress from the pension companies.
Following the meeting, Mrs Liddell said:
"This is the human face of pensions mis-selling. The
statistics tell a grim tale but cannot give a true
picture of just how much distress is caused. However,at
last, it is heartening to meet people who have taken
their complaints forward and - finally - received the
redress they deserve. Their experiences illustrate the
need for all firms involved in mis-selling to start
looking after their customers. Delays and buck passing
must stop.
"The very best customer care must be deployed if the
industry is to regain the trust of its customers ."
The Minister urged people to check their pension provisions
and if they believe they have a complaint, to pursue it. With
compensation payments averaging 7,500 Pounds being made into
people's pension funds, it could make a real difference to
their pension entitlement.
She said:
"We all get a lot of junk mail and it is very easy for
questionnaires from pension firms on the review to get
overlooked. If your company is requesting information
please reply.
"Don't be put off: where it is due, redress will be
made."
When she met 17 firms in September, Mrs Liddell asked each
firm to provide a statement setting out the policy they had
adopted and the practical plans they had made to complete
their reviews and better the targets set for them by the
Personal Investment Authority (PIA). These plans will be
published later this week. The 17 firms have also provided
the first monthly update on the progress they have achieved.
These figures, which cover the period to the end of September,
were published alongside information provided by the 24 firms
with the most cases to review.
The September figures show that:
* 5 of the 41 firms have resolved over half their cases;
* 25 firms have resolved between 25-50 per cent of cases;
and
* 11 firms have resolved under 25 per cent.
On the figures, the Minister said:
"I want the public to have information to help people
judge for themselves just how committed each firm is to
achieving real progress."
"The latest figures illustrate in stark terms how
important it is that firms pull out all the stops.
Clearly it is possible to make progress, though some
firms are still lagging far behind."
NOTES TO EDITORS
1. In May 1997 the Securities and Investments Board (SIB)
and the Personal Investment Authority (PIA) launched a
national advertising campaign to raise awareness of the
pensions review among those potentially affected. As part of
their on-going campaign the SIB and PIA have published a
number of case histories to illustrate how individuals who
were missold a personal pension have benefited from having
their pension reviewed. A copy of the case studies is
attached.
2. Information on the review in the form of a SIB factsheet
can be obtained from freephone 0800 003 007.
3. PIA's Pension Helpline on 0171 417 7001 is available for
people who need advice.
4. Mrs Liddell met with the 24 firms with most cases to
review on 14 May. Beginning on 9 July, the Treasury has been
publishing information on a monthly basis on how fast they are
dealing with cases. The Minister met with representatives of a
further 17 firms on 18 September. Figures for end September
for all 41 firms are in the table attached.
5. So far, the regulators have imposed a number of fines for
offences connected with personal pensions cases. Recent fines
include :
August 1997 The M&E Network was fined 100,000 Pounds by PIA and
reprimanded for its failure to take all
reasonable steps to carry out the review of its
past pensions business in accordance with the
standards prescribed by PIA. In particular, the
firm had delayed the mailing of pensions review
questionnaires to its clients, which is an
essential first step in the pensions review
process. The firm was also ordered to pay costs
of 25,000 Pounds
September 1997 DBS Financial Management Ltd was fined 425,000 Pounds
and reprimanded by PIA after it admitted
failing to take all reasonable steps to carry
out its review of past pension business and to
monitor the review of pensions business
transacted by its representatives prior to
joining DBS. The firm was also required to pay
costs of 19,450 Pounds.
September 1997 Friends Provident was fined 450,000 Pounds and
reprimanded by PIA for failing to take all
reasonable steps to carry out its review of
past pensions business or to monitor the review
by other businesses for which it has
responsibility. The firm was ordered to pay
PIA's costs of 20,000 Pounds.
September 1997 Midland Bank was fined 150,000 Pounds by the
Investment Management Regulatory Organisation
(IMRO) for failing to provide customers with
all the necessary information to help them make
a balanced and informed decision about whether
to carry out a pension transfer. The firm was
ordered to pay IMRO's investigation costs of
70,708 Pounds and a contribution to the disciplinary
costs.
6. If you have access to the Internet you can find this
information at http://www.hm-treasury.gov.uk. Material on
other Treasury issues can also be found at this site.
Table 1
A B C D E F G H
Under 25% of cases resolved
DBS 352 0 0 0 5 0 0 0
Gan 9,936 138 432 184 248 180 2 5
Lincoln National 12,667 916 1,126 486 640 212 2 13
Brittanic 14,780 42 2,892 1,376 1,516 1,091 7 17
Sun Life of Canada 25,806 2,937 1,938 246 1,692 1,278 5 17
Countrywide 485 64 35 20 3 1 0 18
Canada Life 5,404 97 1095 271 824 582 11 18
Windsor Life 8,262 1,264 392 26 366 259 3 19
Friends Provident 6,433 705 848 182 666 514 8 22
London and Manchester 7,693 450 1,959 274 1,685 1,041 14 23
Godwins 1,358 8 344 215 129 100 7 24
25-50% of cases resolved
Financial Options 243 62 1 0 1 0 0 26
United Assurance 12,264 607 3,130 1,026 2,104 1,505 12 26
Burns Anderson 384 32 76 58 21 14 4 27
CIS 43,339 1,835 11,715 8,744 2,971 1,403 3 28
Royal London 10,211 862 2,555 937 1,618 1,033 10 28
IFA Network 520 82 65 62 3 3 1 28
Royal & Sun Alliance 15,182 1,412 3,720 552 3,168 2,369 16 29
Pearl 40,233 1,644 17,716 3,667 14,049 6,360 16 29
Allied Dunbar 17,128 2,133 3,644 1,717 1,927 1,341 8 30
Hill Samuel 5,813 560 1595 412 1183 815 14 31
Albany Life 2,833 377 1174 81 1093 417 15 31
Colonial 7,856 1,631 1,569 185 1,384 812 10 33
Sedgwick 9,821 2,328 1,293 553 740 459 5 34
Abbey Life 17,044 3,368 3,109 681 2,428 1,806 11 34
Standard Life 6,410 260 2,098 865 1,233 1,081 17 34
Prudential 69,198 11,155 22,546 2,241 20,305 11,604 17 36
Guardian 8,619 618 3,288 602 2,686 1,989 23 37
NatWest 13,707 3,204 2,764 705 2,059 1,370 10 39
Commercial Union 7,132 727 2384 655 1729 1369 19 39
Midland 4,711 327 1,928 335 1,593 1,195 25 39
Wesleyan 4,110 190 1822 498 1235 975 24 40
Berkeley Independent 68 27 0 0 1 1 1 41
Lloyd's TSB 47,477 7,138 13,608 3,813 9,795 8,890 19 42
Hogg Robinson 1,743 541 354 87 267 109 6 42
Norwich Union 6,987 1,955 1,622 513 1,109 885 13 48
Over 50% of cases resolved
AXA Equity and Law 3,825 635 1667 663 1004 866 23 57
Legal & General 34,576 13,034 8,935 1,214 7,721 5,316 15 57
M&E Network 266 146 32 10 22 13 5 64
Barclays 16,741 5,625 6,331 1,661 4,650 3,657 22 65
Equitable Life 11,038 5,545 2,059 1,036 1,023 724 7 66
A: cases identified as requiring review
B: of A, cases where investor was informed that information gained during assessment excluded cases from review
C: number of assessments completed
D: cases where the investor has been informed that no redress is due.
E: cases where redress has been offered
F: cases where redress has been accepted.
G: cases where redress has been accepted as a percentage of cases identified for review ((F/A)x100).
H: cases completed, including exclusions, as a percentage of cases identified for review (((B+D+F)/A)x100).