In 2012, the FSA Complaints Commissioner (Sir Anthony Holland) found against a complaint that the FSA had behaved unprofessionally in publishing a statement branding TPLIs as ‘Death Bonds’ that were toxic and Ponzi like. Despite the fact that the FSA subsequently agreed these terms should not have been used, Sir Anthony implied that the statement had been vetted by a number of TPLI providers prior to its release.
” I would like to add that, from the information provided to me by the FSA, it is clear that it was in correspondence with a number of TPLI providers before its statement of 28th November 2011, and that these providers did not object to the publication of the statement. As such, I do not believe that the FSA has acted in an unprofessional manner as you suggest.”
Sir Anthony Holland
Complaints Commissioner
16th January 2012
In order to agree with a statement, one must actually read it or at least be fully aware of its content.
Following repeated requests under the Freedom of Information Act, the FCA have finally conceded that the TPLI providers referred to by Sir Anthony Holland did not see the statement at all prior to its release. All they actually agreed to was the idea of a planned consultation.
“The FSA did not provide those three firms with early sight of the text of the draft guidance itself or the press release, since the publication was itself to be the consultation exercise.”
Information Access Team
Financial Conduct Authority
14th August 2014
There is the world of difference between agreeing with a consultation process and agreeing with an inflammatory statement prior to its commencement. It was indefensible for someone in Sir Anthony’s position to imply that agreeing with the former indicated approval of the latter. According to the FSA themselves, what the TPLI providers actually said about the statement when it was published was very far from approval.
“When publishing the guidance consultation, the FSA should have taken into account the possible impact of its warning on existing TLPI investors as part of our statutory objectives of consumer protection and maintaining market confidence;
· many felt that the use of the terms ‘death bonds’ and ‘toxic’ were overly emotional and inflammatory;
· 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 how did the FSA respond to this feedback?
“We accept that the expression ‘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.
This does not mean that we have found that some TLPIs are Ponzi schemes and no such allegation is made in our guidance or accompanying communications,
nor have we said that this is a trait common to all TLPIs. We will, however, update the wording of the guidance on this point to clarify our meaning.”
Summary of Feedback Received
FSA Consultation Period 28th November 2011 to 23rd January 2012.
The eagle-eyed among you will have noticed that Sir Anthony’s response was sent on 16th January 2012, a week before the consultation closed and feedback from the TPLI providers was published.
There is no evidence whatsoever that any TPLI providers approved of the FSA statement before or after its release. The statement that they did not object to it was misleading, untrue, and as unprofessional as the statement itself.
The consequences of this unprofessional behaviour have been severe for many ordinary savers. As three legal cases get under way, pension funds are liberated, and the privatised FCA continues to drift further from any form of Government control, we must face the reality that savers can no more reply upon protection from the sharks in authority than the sharks who would steal their savings.
Use your vote wisely in the elections next year, if you feel confident enough to use it at all.
Reform the FCA http://epetitions.direct.gov.uk/petitions/63482
Action Group For Life Settlement Fund Investors 