Warrington firms closed by Insolvency Service in pensions investigation

Six rogue pension and finance companies have been closed down by the Insolvency Service, including four based in Warrington.

At least £21m had been invested into 15 schemes.

The companies were wound up in the public interest at the High Court yesterday, May 30.

The Official Receiver is now the liquidator of all six companies, including London-based Fast Pensions Ltd, which was acting as the sponsoring employer.

Four of the companies – Blu Debt Management Ltd, Blu Financial Services Ltd, Blu Personal Finance Ltd, and Umbrell Loans Ltd – were all registered at Gilbert Wakefield House, Bewsey Street, Warrington.

Between 2012 and 2013, 520 people were encouraged to transfer their pension savings from existing providers into one of 15 schemes.

FP Scheme Trustees Ltd (FPST) was the trustee of all 15 pension schemes and a proportion of the funds were invested in the remaining four related finance companies.

The Insolvency Service was made aware of complaints about the management and operation of the companies and following an investigation the High Court ordered that Fast Pensions and the five related companies be put into provisional liquidation in March 2018, following a petition presented by the Secretary of State.

Investigations found that a total of at least £21m was invested into the 15 schemes and people were persuaded to transfer their savings through various methods.

Some received cold calls questioning the performance of their pension funds, or offering free pension reviews.

Others, who were originally looking for credit, were advised by the connected finance companies that they could get a loan if they transferred their pension savings to one of Fast Pensions’ schemes.

Advice provided was inadequate as the companies misrepresented the schemes on offer.

Advisors also failed to disclose information around returns and the high risk and illiquid nature of the investments made by the schemes, as well as the benefits members would be entitled to.

Scheme members were also informed that the investments would consist of a wide ranging portfolio, but investigators found that funds were misused.

At least £4m was used to pay commissions and the remaining funds were largely used to make loans to companies and other entities which appear to be connected with Fast Pensions and FPST.

The six companies failed to preserve, maintain or produce adequate accounting records and failed to cooperate fully with the investigation.

This made it impossible for investigators to determine the full extent of the companies’ activities, the nature and value of the investments made, or the value of the members’ pension funds.

David Hope, chief investigator for the Insolvency Service said: “People work long and hard to put money away for their retirements, but the six companies that have been shut down paid scant regard to their members.

“They used unsavory tactics to attract members and failed to paint the full picture as to what would really happen with their savings.

“By shutting the companies down, the courts have put a stop to their unscrupulous activities and we hope this sends a strong message that we will robustly investigate and take action where people’s funds and savings are at risk.”

The Official Receiver has made an application to The Pensions Regulator for the appointment of an independent Trustee to take over the running of the pension schemes and it is anticipated that the application will take four to six weeks to complete.

Until the application is completed the Official Receiver will continue to act as the trustee to the pension schemes.

This involves: taking steps to protect the investments and assets in the pension schemes; not making investment decisions during the period of appointment; not providing updates regarding an individual’s pension, or authorising transfers out of the schemes, or making any payments out of the schemes, including death benefits; and not providing advice to pension members regarding their pensions.

Members of the pension schemes who require advice should consider contacting a solicitor, a regulated financial advisor or the Pensions Advisory Service on: 0800 011 3797 or email: virtual.appointments@pensionsadvisoryservice.org.uk.

All public enquiries concerning the affairs of the companies should be made to: The Official Receiver, Public Interest Unit (North), PO Box 16663, Birmingham, B2 2JP; email: piu.north@insolvency.gsi.gov.uk.

The pension schemes that were involved are: Broughton Retirement Plan; DM1 Retirement Plan; Elphinstone Retirement Plan; EP1 Retirement Plan; Fleming Retirement Plan; FP1 Retirement Plan; FP2 Retirement Plan; FP3 Retirement Plan; Galileo Retirement Plan; Golden Arrow Retirement Plan; and Leafield Retirement Plan.