Not upheld: Investment mis-selling complaint against Jupiter Unit Trust Managers Limited

Decision detail

Summary

Mr R complained that Jupiter sold all units in his Stocks and Shares ISA and transferred the proceeds without his authorisation. The transfer was initiated in error by Party B (Mr R's financial advisers), who submitted a request to Party A (another ISA provider) without Mr R's permission. Party A then submitted a transfer request to Jupiter, which processed it on 14 July 2021. Mr R discovered the unauthorised transfer on 15 July 2021 and requested it be reversed. The ombudsman found that Jupiter acted appropriately under the TeL electronic transfer scheme by processing the request from Party A, as it had no reason to believe authorisation was lacking and the responsibility for verification lay with Party A, not Jupiter. The complaint was not upheld.

The Ombudsman's reasoning

Under the TeL scheme to which Jupiter is a signatory, Jupiter's role as a non-initiating participant is to fulfil transfer instructions in accordance with the rules unless there is an exceptional circumstance. The scheme clearly allocates responsibility to the initiating participant (Party A) to verify authorisation with the intermediary (Party B). Jupiter had no legitimate reason to believe authorisation was lacking at the time it processed the request, and the error originated with Party B, not Jupiter. The Government guidelines on ISA transfers do not impose specific obligations that Jupiter failed to meet, and the TeL terms incorporate compliance with laws and regulations.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website