The British Steel Adviser’s Group has dropped its legal challenge against the Financial Conduct Authority’s (FCA) decision to set up a redress scheme for former British Steel Pension Scheme (BSPS) members .

The FCA previously pledged to "vigorously" defend the scheme after the legal challenge was first made by a number of pension advisory firms, branding the action as an "attempt to delay the payment of redress that is due to some former BSPS members".

Under the proposed scheme, over 1,000 customers who received unsuitable defined benefit (DB) pension transfer advice are expected to receive redress, in an effort to put consumers back in the financial position they would have been in had they not transferred.

The FCA therefore welcomed the decision to drop the legal challenge, reiterating its view that the challenge was "without merit", and confirming that the British Steel Adviser’s Group will make a "substantial" contribution to the regulator’s costs.

The FCA stated: "This challenge has, in our view, been pursued unreasonably with little intention to go to trial so we are also pleased BSAG has agreed to make a substantial contribution to our costs.

"We have publicly warned and taken action against certain BSAG firms for making unsolicited offers to former BSPS members.

"Under the redress scheme, firms have to review the advice they gave former BSPS members to transfer out and pay redress to those who lost money because the advice was unsuitable."

The FCA also recently formally required two firms to stop making unsolicited settlement offers to former members of the BSPS, after being made aware of firms making unsolicited offers to former BSPS members in a “deliberate attempt” to exclude them from the FCA's redress scheme.

Share Story: