FSCS explains reason for Rowanmoor claims delays

The Financial Services Compensation Scheme has said it is not duplicating work already done by the ombudsman on Rowanmoor claims but there were legal reasons it could not use the recent Fos case as a blue print for its decisions. 

The lifeboat scheme is facing delays with claims about defunct Sipp firm Rowanmoor after hundreds of clients were re-routed from the Financial Ombudsman Service following the provider's collapse in August last year.

Investors have questioned why following a successful sample case at the Fos in January 2022, which found in favour of the investor and asked Rowanmoor to compensate him fully, they were still being asked to wait for Rowanmoor to be declared in default by FSCS, and their claims to be processed, a year later.

Rowanmoor's claims pipeline was credited with its collapse and some claimants have now reached retirement age and are concerned they do not have enough funds to retire with due to delays with their claims.

Chris Bryans, a financial adviser who helps clients with their claims through his firm Complaints SOS, has Rowanmoor claimants who have been waiting for a decision from the FSCS.

He said: "These are ordinary people who have lost their life savings – in many cases several hundred thousand pounds and these retail customers don’t understand how the Fos, the FCA, and now the FSCS, can stand by while their lives are on hold.  

"One of our customers who has lost over half a million pounds from a final salary pension says 'it is exasperating and depressing - there still appears to be no end in sight and still no way clear way out'.

It would not be appropriate for FSCS to simply follow a Fos determination without conducting our own investigations because of our stricter rules.FSCS

"The complete lack of information and detail is what is helping the scammers to target these very vulnerable customers and we are very concerned for their health and wellbeing."

The FSCS has now addressed the long waiting times and why it is unable to use the ombudsman's decision as a blue print.

It explained the way it determines claims and the way the Fos determines its complaints are different, particularly when it comes to the question of whether the firm owes a civil liability to its claimant, which is a core test for claims with the FSCS, but does not determine a Fos decision. 

A spokesperson said: "It is not in our interests to duplicate work that has been done by the Financial Ombudsman Service or delay declaring a firm in default and processing customers’ claims.