Upheld: unauthorized access to pension benefits due to data merge error; failure to identify and prevent unauthorized access across multiple products complaint against Scottish Widows Limited
Financial Ombudsman decision DRN-6342019 of 2026-05-07T00:00:00+00:00. unauthorized access to pension benefits due to data merge error; failure to identify and prevent unauthorized access across multiple products complaint against Scottish Widows Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-6342019 |
|---|---|
| Decision date | 2026-05-07T00:00:00+00:00 |
| Firm | Scottish Widows Limited |
| Product | personal pension (stakeholder) |
| Claim type | unauthorized access to pension benefits due to data merge error; failure to identify and prevent unauthorized access across multiple products |
| Outcome | Upheld |
| Remedy | Scottish Widows Limited must pay Ms T £700 compensation if not already done so. If the original cheque was not encashed, Scottish Widows should send a replacement cheque or pay £700 directly to Ms T's bank account if she provides details. |
Summary
Ms T complained that Scottish Widows Limited allowed a third party (Mrs M) to access her stakeholder personal pension without her knowledge following a 2021 data merge error that also affected her bank account. The pension was encashed in September 2021 for approximately £6,748, but was restored in 2025 to its correct value of just over £9,200. Ms T sought additional compensation and a full refund of contributions, but the ombudsman found the pension was correctly restored with no financial loss and upheld the complaint only to the extent of confirming the £700 compensation already offered was appropriate.
The Ombudsman's reasoning
The ombudsman found that while the situation was worrying and Scottish Widows missed an opportunity to check all products for erroneous links to Mrs M when the bank account error was discovered in 2021, the pension was correctly restored to its proper value with no actual financial loss to Ms T. The unit count of 2,603.56 was verified as correct through pre-2021 statements, and the restored value was based on prevailing unit prices. Since Ms T cannot access her pension until age 55 (2027), the restoration was appropriate. The £700 compensation was consistent with FOS guidance for situations causing considerable distress and significant inconvenience over many weeks or months.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Scottish Widows Limited, all decisions | 827 | 20% |
Source
Read the original decision on the Financial Ombudsman Service website