Panacea comment for Financial Advisers and Paraplanners
24 Oct 2016
Advisers may be concerned to know about the continued, contentious handling of personal data by the FSCS where claims are received.
In particular where the adviser has retired and the firm in question was NOT in default of the scheme some 20 years later.
With regulators looking at personal responsibility from company directors, in the words of Hector Sants, all advisers should be very afraid, and to the grave it would seem?
When a ‘consumer’ approaches the FSCS (looking to claim compensation) as the firm from whom advice was obtained is no longer trading and not in default (as the adviser has retired) the FSCS, if requested by the ‘consumer’, is releasing information as to the whereabouts of that now retired adviser, whether or not the adviser has consented to that release.
In correspondence seen, the FSCS is stating that it has the right to release such data when requested; quoting guidance it says it has from the Information Commissioners office (ICO).
This states, “ Where the FSCS has rejected a claim for solvency reasons (firm not in default) and the consumer wishes to pursue a claim, disclosure is permitted under the Data Protection Act 1998.
They go on to refer to the fact that they have received guidance from the ICO to that effect- providing this summary.
Now here is the situation, and advisers should rightly be very concerned as this could happen to anyone and illustrates only too well the need for a longstop.
The date of the advice being claimed against (relating in this case to affordability surrounding a mortgage protection policy with CI) was in 1997, almost 20 years ago.
If the firm was in default and the FSCS did accept such a complaint, it would be dismissed as they do recognise the longstop.
The advisory firm- a partnership in this case, closed in a correct way in 1998 with full PIA regulatory approval and it is not in FSCS default.
The adviser made it clear that he did not wish his address to be given and he gave some specific, valid reasons in response to the FSCS’s asking.
These reasons were dismissed out of hand, without any explanation as to why other than to refer to ICO guidance.
The adviser told the FSCS that he would complain to the ICO. He felt it was unfair to release his details when the firm was not in default and that the complaint would have been dismissed under FIMBRA, PIA and FSA rules as well as the FSCS own rules by way of being out of time on so many levels, including the FSCS’s own application of a longstop.
As a result the FSCS then advised the ICO, to whom that complaint about data release was made, that the complaint was made to “delay the consumer in getting compensation”.
The FSCS, in saying it can release data so long after the date of the advice being given, reasons that “considerable weight has to be given to the legitimate interests of the customer”.
In this case the decision seems very unfair, surely the adviser has rights too?