Curtis Banks Self Invested Personal Pension · CAS-53394-T6G2

CAS-53394-T6G2

Ombudsman’s Determination Applicant Mr S

Scheme Curtis Banks Self-Invested Personal Pension (the SIPP)

Respondent Curtis Banks Ltd (Curtis Banks)

Outcome

Complaint summary

Background information, including submissions from the parties Mr S held the SIPP, which was administered by Curtis Banks. The investments in the SIPP were managed by Investec Wealth.

On 8 January 2020, Investec Wealth sent an email to Curtis Banks and informed it that Mr S intended to pay the Contribution, totalling £40,000, into the SIPP. Investec Wealth requested information about the best way to do this.

On the same date, Curtis Banks replied that Mr S needed to complete a Contribution Form and submit it by post to its Bristol Office. Alternatively, he could submit it using Curtis Banks’ online portal. CAS-53394-T6G2 On 14 January 2020, Investec Wealth sent Mr S’ completed Contribution Form to Curtis Banks by email and asked it to check that the Form had been completed correctly. Investec Wealth also confirmed that Mr S would be paying the Contribution on the same date.

Curtis Banks replied that it required part 3.2 of the Contribution Form to be completed. It added that it could accept a copy via its online portal, but if it was sent by post then it required an original signature. It also confirmed that it could not accept a copy by email.

On 17 January 2020, Investec Wealth sent a copy of the completed Contribution Form to Curtis Banks by email and asked it to confirm that it had been completed correctly, so it could send it by post.

On the same date, Curtis Banks informed Mr S that it was in receipt of the Contribution and asked him to confirm whether he had any investment instructions to give. Mr S replied that the Contribution should be credited to the “SIPP account manager on my behalf by Investec”.

On 20 January 2020, Curtis Banks allocated the Contribution into the SIPP’s bank account and confirmed to Investec Wealth that the Contribution Form had been completed correctly. Investec Wealth posted the Form on the same date.

On 21 January 2020, Curtis Banks received the Contribution Form and informed Investec Wealth that it had received the Contribution. Investec Wealth asked Curtis Banks what was required for the Contribution to be transferred to Mr S’ investment portfolio.

On 22 January 2020, Curtis Banks replied that it required an instruction to be sent via its secure messaging system or in a signed letter. On the same date, Investec Wealth informed Curtis Banks that Mr S had already sent his instructions. After checking, Curtis Banks confirmed that it had already received Mr S’ instructions via its secure online portal.

On 24 January 2020, Curtis Banks transferred £39,568.72 to Investec Bank, which is a different entity from Investec Wealth.

On 27 January 2020, Investec Wealth asked Curtis Banks to confirm when it could expect to receive the Contribution.

Between 28 and 30 January 2020, Curtis Banks and Investec Wealth entered into extensive correspondence, as it transpired that Curtis Banks had transferred the Contribution to the wrong company.

On 31 January 2020, Investec Wealth received £39,568.72 from Investec Bank.

On 3 February 2020, Investec Wealth complained to Curtis Banks on behalf of Mr S, regarding the error of sending the Contribution to the wrong company.

2 CAS-53394-T6G2 On 4 February 2020, Investec Wealth informed Curtis Banks that the Contribution had been applied to Mr S’ investment portfolio and would be available for investment the following day. It also confirmed that Mr S wished to pursue his complaint and to seek compensation for the missed investment returns.

On the same date, Curtis Banks sent an email to Mr S and said that an error had occurred when transferring the Contribution to Investec Wealth for investment. Curtis Banks explained that the Contribution had been sent to Investec Bank instead. As soon as Curtis Banks was notified of its error, an internal reconciliation exercise was completed, and Investec Bank was contacted to rectify the matter. Curtis Banks also confirmed that the Contribution had been received by Investec Wealth, which was in the process of applying it to Mr S’ investment portfolio. Curtis Banks apologised for the error and assured Mr S that additional measures had been implemented to ensure this did not happen in the future.

Also on the same date, Mr S replied to Curtis Banks and said that Investec Wealth had already raised this issue as a formal complaint. In the complaint, the matter of compensation for loss of use of the money was raised. He added that his experience with Curtis Banks had been dismal, due to delays, errors, and miscommunication.

On 5 February 2020, Curtis Banks contacted Investec Wealth and asked it to confirm whether Mr S had suffered any loss as a result of the delay in sending the Contribution to the correct party.

On 7 February 2020, Curtis Banks acknowledged Mr S’ complaint.

On 2 March, 30 March and 29 April 2020, Curtis Banks informed Mr S that it was still investigating his complaint.

On 20 July 2020, Curtis Banks responded to the complaint. It said:-

• It had received the Contribution on 22 January 2020. It then attempted to pay the Contribution to Investec Wealth by “next day Faster Payment”, on 24 January 2020. Investec Wealth should have received the money by 25 January 2020. Instead of this, Curtis Banks sent the Contribution to Investec Bank in error.

• This should not have happened, and feedback had been provided to the department responsible. Action to rectify the error began immediately and the Contribution was paid to Investec Wealth on 31 January 2020.

• Its error meant that there was a seven-day delay for the Contribution to reach the correct recipient. In recognition of this, Curtis Banks offered Mr S £61.32, which represented seven days’ interest on the amount transferred, at the rate of 8% per annum.

On 24 July 2020, Mr S informed Curtis Banks that he was rejecting its offer. He said:-

3 CAS-53394-T6G2 • Curtis Banks’ delay in dealing with the matter was unacceptable. It had presented the nationwide lockdown due to COVID-19 as the reason for the delay. However, the issue predated the lockdown by at least five weeks.

• The dates Curtis Banks gave in its complaint response were not accurate. The Contribution was transferred to Curtis Banks on 14 January 2020, using Bankers' Automated Clearing System (BACS). He could not understand why Curtis Banks received it on 22 January 2020.

• He also did not understand why Curtis Banks stated that there was a delay of one week, when the delay was three weeks.

In his submissions to The Pensions Ombudsman (TPO), Mr S said in summary:-

• As a result of Curtis Banks’ error, he lost use of the Contribution money for three weeks.

• This was not the first time he experienced poor administration by Curtis Banks. In 2017, it did not process a pension contribution paid by cheque from his employer for a period of three weeks after it was sent. As a result, the contribution was carried into the next tax year.

• He agreed with the fundamental principle of calculating his financial loss by means of an interest rate calculation. However, he disputed the period of delay identified by Curtis Banks.

• He sought financial compensation for the loss of use of the Contribution money, as well as compensation for the time he spent dealing with the matter and the inconvenience he had suffered. In his view, if one’s advisers alerted them to the fact that a sum of £40,000 had gone missing on its way to them, that person would feel angry, upset, and anxious, until the funds were discovered. In addition to the time he had wasted sending and responding to emails, and the subsequent necessity to raise a formal complaint, it was not possible to measure or document the additional time taken in telephone calls with Investec Wealth and other parties, trying to resolve the issue.

• He and Investec Wealth spent several hours trying to resolve the matter. He had since spent further time chasing a response, a resolution to the complaint and referring his complaint to TPO.

• It accepted that it caused a delay in making the Contribution available to the correct investment account, following its receipt. Due to an administration error, the Contribution was sent to an incorrect account with Investec Bank. There followed a seven-day delay in getting the money back and transferring it to the correct investment account.

4 CAS-53394-T6G2 • It calculated loss at the rate of 8% per annum for the delay in making the Contribution available and made a compensation offer of £61.32. It did not have access to the investment account in order to determine what investments were made following receipt of the Contribution.

• Its response to Mr S’ complaint misquoted the date the cleared funds were received. The Contribution actually cleared into Mr S’ SIPP account on 20 January 2020 and was subsequently transferred to the incorrect Investec account on 24 January 2020. Investec Wealth queried the whereabouts of the Contribution on 27 January 2020 and over the next few days there were email exchanges until the money was traced.

• Subsequently, the Contribution was found by Investec Bank, and it confirmed to Curtis Banks, on 29 January 2020, that it would complete an internal transfer to the appropriate investment account. The money was received in the correct investment account in the afternoon of 31 January 2020. Had the error not occurred, the Contribution would have been available for investment on 27 January 2020, rather than 3 February 2020. This accounts for the seven days of interest Curtis Banks had offered.

• On 5 February 2020, Curtis Banks asked Investec Wealth to confirm the specific investment loss to Mr S, so that it could place him in the correct financial position and ensure no loss had occurred. Investec Wealth did not respond. In the absence of any specific loss, calculating loss at 8% per annum was fair and reasonable.

• Curtis Banks always sought to place an investor in the correct financial position. If there had been actual loss greater than the interest rate of 8% offered, it would agree to cover that loss.

Adjudicator’s Opinion

• Regarding Curtis Banks’ error in 2017, when it delayed processing a pension contribution paid by cheque, Mr S did not provide any evidence to show that he had complained about this issue directly to Curtis Banks. As TPO cannot investigate complaints where the applicant has not brought them to the attention of the respondent first, the Adjudicator concluded that TPO could not investigate this issue as part of Mr S’ current complaint.

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7 CAS-53394-T6G2 Ombudsman’s decision

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I uphold this complaint in part.

Directions

Anthony Arter CBE

Deputy Pensions Ombudsman 16 November 2023

9 CAS-53394-T6G2 Appendix 1

“4 Contributions

…

4.6 Contributions may be single contributions or regular contributions and our contribution form must be fully completed in order for us to accept the contribution. Single contributions must be paid by cheque or direct credit. Regular contributions must be paid by direct debit and must quote the SIPP reference number in the payment narrative.

…

4.10 We will only act on an investment instruction when the contribution received is in a cleared funds state.”

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“151A Interest on late payment of benefit

Where under this Part the Pensions Ombudsman directs a person responsible for the management of an occupational or personal pension scheme to make any payment in respect of benefit under the scheme which, in his opinion, ought to have been paid earlier, his direction may also require the payment of interest at the prescribed rate.”

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“Payment of interest on late paid benefit

6. (1) For the purposes of section 151A of the 1993 Act (interest on late payment of benefit), the prescribed rate of interest shall be the base rate for the time being quoted by the reference banks.

(2) In paragraph (1) above—

(a) “base rate" means the rate for the time being quoted by the reference banks as applicable to sterling deposits or, where there is for the time being more than one such base rate, the rate which, when the base rate quoted by each bank is ranked in a descending sequence of four, is first in the sequence; and

(b) “reference banks” means the four largest persons for the time being who—

(i) have permission under Part 4 of the Financial Services and Markets Act 2000 to accept deposits,

(ii) are incorporated in the United Kingdom and carrying on there a regulated activity of accepting deposits, and

(iii) quote a base rate applicable to sterling deposits.”

12 CAS-53394-T6G2 Appendix 4 Relevant extracts of the Pension Schemes Act 1993

“151 Determinations of the Pensions Ombudsman.

(1) Where the Pensions Ombudsman has conducted an investigation under this Part he shall send a written statement of his determination of the complaint or dispute in question—

(a) to the person by whom, or on whose behalf, the complaint or reference was made, and

(b) to any person (if different) responsible for the management of the scheme to which the complaint or reference relates]F2...

and any such statement shall contain the reasons for his determination.

(2) Where the Pensions Ombudsman makes a determination under this Part or under any corresponding legislation having effect in Northern Ireland, he may direct any person responsible for the management of the scheme to which the complaint or reference relates to take, or refrain from taking, such steps as he may specify in the statement referred to in subsection (1) or otherwise in writing.”

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