Complaints Continue to Surface at the Former Carey Pensions
The Financial Ombudsman Service (FOS) has upheld four additional complaints against self-invested personal pension (SIPP) provider Carey Pensions, now known as Options UK Personal Pensions.
All four rulings, published on 4 November 2024, revealed that the complainants believed Options UK Personal Pensions should not have accepted their SIPP and investment applications via unregulated third-party firms. They claim they were not adequately warned about investing in high-risk company Emmit.
A Recent Case: Ms K’s Experience
In one notable case, the complainant, Ms K, was encouraged by three unregulated entities (referred to as Firm A, Firm B, and Firm C) to transfer her pension into a SIPP with Options in order to invest in Emmit through a stockbroker account.
On 19 January 2014, Ms K signed a SIPP application form, confirming she was proceeding without financial advice under an “execution-only” agreement, meaning she bore full responsibility for investment decisions. She acknowledged seeking advice elsewhere and understanding the associated risks. By March 2014, Options had accepted the application and completed the pension transfer.
Later that March, Options contacted Ms K by phone and email to reaffirm that she understood the risks and lack of advice. They also highlighted that Firm C was unregulated. By April and May 2014, Ms K transferred around £43,500 into her SIPP.
In May, Ms K decided to open a stockbroking account with Firm D – an appointed representative of Alexander David Securities (regulated by the FCA but liquidated in 2022) – instead of proceeding with Cornhill Capital for advisory dealing.
By July 2014, Ms K had instructed Firm D to invest part of her SIPP in Emmit. However, Options failed to disclose whether Firm D had adequately warned her of the investment’s risks.
In November 2014, Options notified Ms K of the Financial Conduct Authority’s (FCA) concerns regarding Emmit. By this point, her investment had been suspended and deemed worthless.
Ombudsman’s Ruling
The Ombudsman concluded that Options should not have accepted business from Firm C, stating:
“Options failed to exercise due skill, care, and diligence, thereby exposing Ms K to significant risk. By accepting her application, Options did not organise and control its operations responsibly, nor did it treat Ms K fairly. In doing so, Options breached its obligations and fell short of industry standards at the time.”
The ruling directed Options to calculate fair compensation by assessing the difference between Ms K’s current position and where she would be had she retained her original pension.
Similar decisions were made in three other cases (Mr W, Mr W, and Mr W), all ruled in favour of the complainants.
Court of Appeal Dismisses Options SIPP Judicial Review
In June 2024, the Court of Appeal dismissed Options UK Personal Pensions’ request for a judicial review against a prior FOS decision involving another claimant, Mr F.
Mr F’s case stemmed from his 2011 pension transfer to Carey Pensions after being encouraged by unregulated Spanish firm CL&P to invest in store pods. The investment ultimately failed, resulting in the loss of his pension.
The Ombudsman found that Carey had not conducted proper due diligence on CL&P or the investment, breaching the FCA’s Principle 6, which mandates firms act in customers’ best interests.
Key Points from the Court Ruling:
- Legal Standards – The court rejected Carey’s claim that the Ombudsman’s decision departed from legal principles. It upheld the Ombudsman’s authority to award compensation based on fairness, even if no legal claim would succeed in court.
- Due Diligence – Carey’s argument that they were not obligated to vet introducers or investments under “execution-only” agreements was dismissed. The court found that existing case law supported the Ombudsman’s view that due diligence was required.
- Irrationality Claim – Carey’s claim that the decision was irrational, citing prior FCA approval of their processes, was rejected. The court noted discrepancies in Carey’s dealings with the FCA, reinforcing the Ombudsman’s findings.
The Court of Appeal ultimately upheld the Ombudsman’s decision, denying Carey’s appeal on all counts.
Have You Lost Money Due to a Mis-Sold SIPP?
If you believe you have been mis-sold a pension or high-risk investment, you may be entitled to compensation. Don’t wait – start your claim today with Claim My Loss. Our experts are here to help you navigate the claims process and recover what you deserve.
