Pensioners could benefit from forensic investigation
The Financial Conduct Authority (FCA) has announced that it is to carry out a “forensic analysis” on thousands of annuities sold on a non-advised basis since 2008 to see if they were unsuitable for savers. Hundreds of thousands of pensioners may benefit from the investigation, as it is believed that more than 600,000 of them could have been sold annuity contracts that failed to account for their health in the six-year period under review.
According to the regulator, common medical conditions such as diabetes and high blood pressure could have boosted payouts by 20 per cent or more in many cases, causing savers to miss out on tens of thousands of pounds over the course of their retirement.
Forensic investigators will therefore scrutinize a large sample of sales from all of the UK’s major insurers, with a primary focus on whether those customers who were entitled to ‘enhanced’ annuities were actually recommended them. As is the norm with forensic investigation, it is not just the numbers that will be scrutinised but also telephone call logs between firms and their customers and all the paperwork sent to savers before they retired. If the FCA finds evidence that a pension provider failed to treat its customers fairly then it will order the firm to issue compensation.
The FCA will be using forensic accountants to find out whether compensation is due, as a forensic investigation is the best way to find out what actually happened in any financial transaction. These experts will look at the bigger picture, as mentioned, and will examine every shred of evidence in their quest to get to the truth.
Author: Roger Isaacs, 25 September 2015
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