FSCS declares EU passported firm as failed

Abana Unipessoal Lda, formerly Abana Lda (FRN 597069), used the EU passporting rules to operate in the UK but went beyond its remit in arranging SIPP-connected pension transfers.

The FSCS said the claims it has received so far were for activities that took place during the passporting period. The FSCS has had 15 claims in total, 5 are for pensions advice and 1 is for miss-sold life insurance. Nine have yet to be fully clarified. 

The life insurance claim is the only upheld so far allowing the default to be declared. All the rest are still in progress.

According to the compensation body, Abana prior to December 2020 passported into the UK on a ‘services’ basis with its passport restricted to insurance intermediation in the UK.

However the FSCS says it has now determined that Abana undertook regulated activities for customers outside of Abana’s insurance intermediation permissions in the UK.

These regulated activities included arranging pension transfers, notably into the Avalon & Westerby SIPP, both UK-based SIPP providers.

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FSCS is now opening the door to claims against Abana Unipessoal Lda (Abana). The FSCS can pay compensation of up to £85,000 per claim however the FSCS in a statement this week says only that it ‘may’ pay claims subject to investigation as some may fall outside its rules.

The FSCS said there was evidence that Abana arranged and / or advised on a customer’s pension transfer in the UK through Abana’s agents with some pension transfers into the Avalon SIPP.

The FSCS said there was also evidence to suggest that after late May 2014 Abana was not liable for the acts or omissions of its agents in arranging or advising customer pension transfers. The FSCS said that Albana did arrange a customer pension transfer after late May 2014 but did so on a basis which FSCS protection does not extend to. This means some claims may be rejected.

The FSCS said in its statement: “Accordingly, while each claim will be considered on its merits, some customer claims against Abana involving pension transfers after late May 2014 may not meet the qualifying conditions for FSCS to pay compensation. FSCS will write to those customers whose claims fall into this category.”

The Financial Ombudsman Service has issued a number of decisions upholding customers’ complaints against Abana. Customers’ claims submitted to FSCS against Albana will be considered on a case by case basis by FSCS and under its rules, which it pointed out are different to the FOS rules.

The FSCS is currently only open to claims against Abana from customers who transferred their pension into the Avalon SIPP and not the Westerby SIPP.

The FSCS said: “This is because FSCS understands that Westerby SIPP is still a live entity. Any claims against Abana involving a transfer into the Westerby SIPP should be directed to Westerby SIPP, or the FOS as appropriate.”

In May last year the Financial Services Compensation Scheme said it was probing two overseas-based adviser firms which used used EU ‘passporting’ rules to advise UK clients on pension transfers, Irish firm Wellington Court FS Ltd and Portuguese firm Abana Unipessoal Lda. Both were ‘passported’ into the UK under the EU Insurance Distribution Directive, allowing them to transact business in the UK.

• Editor’s Note: Story updated to include more details about claims.