The UK’s Financial Ombudsman Service (FOS) has sided with five individuals who lost almost £100,000 after transferring their savings following a free pension review. The decision could pave the way for thousands of others who lost money in a similar way to claim back their investment.
The cases relate to investments between 2013 and 2016, into schemes including Ethical Forestry and Global Plantations.
Solicitor firm Anthony Philip James & Co issued five cases against Sipp administrator Guinness Mahon Trust Corporation over allegations it worked with unregulated introducers to facilitate non-standard investments.
APJ said the FOS rulings challenged the argument of the Sipp provider that it only accepted business on an execution-only basis, meaning it was not liable for any losses suffered.
The five victims were cold called and persuaded to invest their pension pots into Ethical Forestry, a scheme offering guaranteed returns of up to 15% from tree plantations in Costa Rica. The scheme failed after the plantation was hit by a hurricane.
The investments were made on an advised basis via unregulated introducer Avacade. It conducted free pension reviews and promised people more lucrative returns than their pensions would have offered.
The number of Sipp and pension transfer complaints referred to the Financial Ombudsman Service (FOS) has risen by 77% recently.