Letter to MPs – Action for all TPLI Victims

Phase Two of the Campaign – Write to MPs

As the number of signatories to the epetition passes 300 and more names are added each day, it is time to turn up the heat on the campaign for compensation and reform of the FCA.

The enclosed letter (see link: Letter to MP ) is intended to be suitable for all victims of the FSA’s handling of TPLIs whether EEA, ARM, Keydata or other funds/organisations.

Not sure who your MP is or how to contact them? Here is a link that will help you; MPs – UK Parliament. You can also write to, or email members of the Treasury Select Committee on the following link; Treasury Select Committee.

Summary

Thousands of ordinary people placed their hard-earned savings into what they believed was a highly ethical and low risk investment vehicle; Life Settlement funds.  The sector had a track record of steady, if not stella performance, and a number of funds within it were either regulated or authorised by the FSA – they had been for several years.

In 2011, the FSA made an announcement that shocked most ordinary savers. They branded the sector  ‘toxic’ and ‘Ponzi like’, referred to the funds as ‘Death Bonds’ and pronounced that they were not suitable for retail investment. By the time this announcement was made, thousands of ordinary savers had already invested in the sector and had been doing so for years.

The announcement directly led to a run on the funds and the unprecedented demand for redemptions resulted in a suspension of trading that denied investors access to their savings and the income they had hoped to receive.

Over two years later, savers are still without access to their funds and are still unable to draw their income.

The FSA Action

The FSA declared that they had harboured concerns about the sector for several years; which begs the question of what they were doing during this time, as more and more savers ploughed their money into the sector. They stated that they needed to instigate a consultation but their derogatory conclusion was announced before the consultation even began.

The FSA published what they called a ‘Cost Benefit Analysis’ to justify their action. In this analysis, which failed to include the costs to existing savers or quantify the benefits to potential future savers, they made clear that they fully anticipated the damaging impact of the announcement they were about to make.

They have subsequently defended the announcement and continued to use the inflammatory language that led to the collapse of several funds.

The Complaints Procedure

Human Rights law states that every person has the right to the peaceful enjoyment of their property, including their savings. It also states that no government body should take actions that interfere with that right unless the common good is greater and they have exhausted less harmful alternatives to the action they are contemplating.

Several of those who have lost access to their savings have complained to the FSA and their successor the FCA. The basis for many of these complaints was the unprofessional manner in which the FSA made their announcement. The FSA were accused of failing in their duty of care towards those they existed to protect.

The FSA flatly refused to even consider these complaints and stated they ‘fell outside the remit of the complaints system’. The only recourse was for complainants to contact the Complaints Commissioner.

The Complaints Commissioner also rejected the complaints and stated that a number of fund providers did not object to the announcement before it was made.

The  Admissions

Following criticism that the FSA began a consultation with an announcement that demonstrated they had already reached their conclusions, the Complaints Commissioner subsequently admitted, “the announcement could be, as you suggest, premature”.

Despite numerous denials when accused of inaccurately describing funds as ‘toxic’ the FCA have finally admitted, “‘toxic assets’ has been used in the press in relation to financial instruments such as CDOs and CDSs and that our use of it here may have led to some confusion for some customers.”

After defending their description of funds as ‘Ponzi like’ the FSA now say, “We should not have said that certain TLPI models carry risks that make them appear to share some of the characteristics of Ponzi schemes.”

And despite the categorical assurance that providers did not object to the announcement before it was published, the FCA now conceded that they “did not pre-consult on the wording of the announcement.”

In addition, they have now confirmed the true feelings of those providers they consulted and it is completely the opposite to that stated. “Many felt that the use of the terms ‘death bonds’ and ‘toxic’ were overly emotional and inflammatory;” And yet the FCA has continued to use such slang, unprofessional terms in the public arena.

It has taken years of badgering and the power of the Freedom of Information Act to get to the truth.

The above statements are not ‘interpretations’ they are committed to print and they prove that the original wording of the FSA statement was inaccurate and unprofessional. They also prove that the complaints system and office of the Commissioner are a sham.

There is more. Not only were the FSA unprofessional in what they did, they were also guilty of inaction. Despite the scrutiny of enquiry, there is no evidence to support the assertion that they contacted the industry to warn providers and allow them to prepare for the impact upon their liquidity. There is also no evidence that the FSA considered any alternative actions to their damaging announcement, contrary to their duty of care and their obligations under Human Rights law.

You Can Help!

Thousands were affected by the reckless announcement of the FSA and the claims for compensation and reform will not be stifled.

Every bit of information, every retraction, every muted apology, has needed to be dragged out of them. Now we need to mobilise the support of a campaigning journalist and any political representatives who have the courage to speak out.

If you know any such professionals, please forward this post to them and ask them to get involved.

Follow on Twitter @ReformFCA

Sign the government petition:

http://epetitions.direct.gov.uk/petitions/63482