The Financial Conduct Authority (FCA) has raised concerns over the use of third-party services when calculating redress for former British Steel Pension Scheme (BSPS) members, after taking action against a third firm to reverse the effect of misleading BSPS offers.

The FCA previously confirmed that it was looking into reports of firms making unsolicited offers to former BSPS members and warned firms to withdraw any existing settlement offers, having already required two firms to stop making unsolicited settlement offers to former BSPS members.

Following on from this, the FCA has taken action against a third firm, David Stock & Co Limited, revealing that the firm made unsolicited offers of £50 to 48 per cent of its clients who had been BSPS members and had not yet complained.

The regulator also raised concerns that these unsolicited settlement offers were not calculated in line with its guidance, suggesting again that they were "a deliberate attempt to exclude former BSPS members from the redress scheme".

Given this, the watchdog imposed requirements on David Stock & Co, meaning that consumers who accepted these unsolicited offers must be treated in the same way as those who did not, ensuring that all eligible customers receive the redress they are entitled to.

Alongside the specific action taken against David Stock & Co, the FCA published a Dear CEO letter to raise concerns with firms that have calculated redress using third party actuarial providers online portals, without any actuarial oversight, prior to the redress scheme commencing.

The FCA said that this appears to have been a contributing factor to the misleading redress offers, encouraging firms that calculated redress for former BSPS members using third party services to review those offers, even where they have been accepted on a full and final basis, and notify the FCA.

"We will not tolerate any attempt from firms to exclude former BSPS members from the redress scheme and we will take further action to put a stop to it as needed," the FCA stated.

The FCA's redress scheme is expected to see over 1,000 customers who received unsuitable DB pension transfer advice receive redress, in an effort to put consumers back in the financial position they would have been in had they not transferred.

Under the FCA's scheme, firms must review the advice they gave and pay redress to those who lost money because the advice was unsuitable.

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