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Guinness Mahon decision sees APJ clients awarded compensation

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The Financial Ombudsman Service (FOS) has ruled in favour of individuals who’ve lost nearly £100,000 after transferring their pensions. The Guinness Mahon decision will see clients receive compensation.

Our clients

Our five clients transferred between £13,000 and £26,000 into self-invested personal pensions (Sipps) have had positive rulings from the FOS. This was they fell victim to a scam advice given in free pension reviews.

The Guinness Mahon decision challenges the argument of the Sipp providers that they only accepted business on an execution only basis, so are not liable for any losses suffered. This paves the way for thousands who have lost money after free pension reviews by scam advisers to claim back their losses.

The decisions come as the Financial Conduct Authority (FCA) launched a campaign to warn against the dangers of pension scams.

Ethical Forestry and Avacade

Unregulated introducer Avacade cold-called the victims. They then persuaded them to invest their pension pots into Ethical Forestry. The forestry scheme guaranteed returns of up to 15 percent from tree plantations in Costa Rica. The investments were made through Sipp provider Guinness Mahon.

The scheme promised high returns for low risk. However, the notorious Ethical Forestry scheme was hugely risky and failed after the plantation was hit by a hurricane. The directors are currently under investigation by the Serious Fraud Office (SRO) for mis-leading investors.

The FCA also announced in August that the directors of Avacade, which entered administration in 2017, are subject to civil proceedings. They were found responsible for £86 million in misleading and scam pension transfers affecting at least 2,000 people.

Guinness Mahon decision

Our expert litigator Glyn Taylor said: “Our clients have all been mislead by unscrupulous advisers at Avacade who have subsequently tried to dodge all responsibility. These clients simply wouldn’t have moved their money out of their original pensions had it not been for the unsolicited advice from Avacade.

“The FOS decisions are all similar in that they establish that Guinness Mahon should have known that it would not be treating the individuals fairly.

“As Avacade is an unregulated adviser, our clients had no option to go the Financial Services Compensation Scheme (FSCS) for compensation. Until now, they had been left high and dry. In recognising that Guinness Mahon is also liable for the losses the FOS have given these people the chance to reclaim their pension pots.”

The FOS has ruled that our clients should receive compensation from Guinness Mahon. The payout will put them back in the position they would have been had they not transferred their pension from their original workplace schemes.

We have more cases lodged with the FOS against Guinness Mahon.

Glyn added: “We have over 1,500 clients who we believe have been mis-sold Sipp investments by Avacade and other untrustworthy advisers. The Guinness Mahon decision paves the way for others in similar situations. We’re now seeking to secure similar rulings for other clients who invested with other Sipp providers.”

If you invested with Avacade or into the Ethical Forestry scheme, you were likely mis-sold a scheme. Get in touch with our experts for support and advice.