Arch Cru investors: Capita ignored FSA's TCF charter

Thousands of Arch Cru investors have written to their MPs today accusing Capita of intentionally violating the Financial Services Authority's treating customers fairly (TCF) charter.

The FSA states TCF "is central to the delivery of our retail regulatory agenda, which aims to ensure an efficient and effective market and thereby help consumers achieve a fair deal".

TCF is part of the regulator's core supervisory work and firms' delivery of the TCF outcomes is assessed using the FSA's risk-responsive operating framework, ARROW.

In the letters to MPs, investors who have lost money in Arch Cru and who argue the £54m partial payment deal on offer from Capita is unfair, argue Capita's performance as the fund range's authorised corporate director breaches all six outcomes in the FSA's TCF charter.

"It appears...Capita has intentionally not complied with one single outcome as detailed in the FSA's TCF Charter," the letter, seen by IFAonline, reads.

"The FSA has a Charter to tell companies how to treat consumers. Why has Capita torn that up? Why, having lost all this money in an FSA and Capita regulated scheme, are we being left in the lurch?"

Investors have asked MPs to support a cross-party Select Committee to seek full compensation for their losses, and call for an Early Day Motion to ask Treasury secretary Mark Hoban to launch an enquiry into the roles of Capita and the FSA in the Arch Cru debacle.

In the meantime, they want MPs to force Capita to lift requirements on investors to decide on the £54m deal without the information from the FSA about how the offer was calculated, and the demand that investors give up all rights to challenge the current offer in future if they accept the current deal.

The Regulatory Legal Investors' Steering Group, set up by the law firm acting on behalf of 2,700 Arch Cru investors, organised the letter writing campaign. It has also sent copies of all the letters to Capita's chief executive Paul Pindar.

How Arch Cru investors claim Capita breached TCF

Outcome 1: Consumers can be confident that they are dealing with a company where the fair treatment of customers is central to the corporate culture.

"My treatment has been highly unfair. I have incurred huge losses from the Arch Cru investment."

Outcome 2: Products and services marketed and sold in the retail market are designed to meet the needs of identified consumer groups and are targeted accordingly.

"Capita was responsible for fund compliance. The funds were sold as cautious managed; Capita had daily responsibility for oversight, and the funds were anything but cautious managed."

Outcome 3: Consumers are provided with clear information and are kept appropriately informed before, during and after the point of sale.

"We have had no explanation at all about either the offer or what went wrong."

Outcome 4: Where consumers receive advice, the advice is suitable and takes account of their circumstances.

"We have had no advice, just an inadequate offer shrouded in secrecy, and we are being asked to accept this offer and sign away all future legal rights."

Outcome 5: Consumers are provided with products that perform as firms have led them to expect, and the associated service is of an acceptable standard and as they have been led to expect.

"The Arch Cru funds did apparently ‘perform' as expected but this was just a fairy tale and even Capita has admitted as much."

Outcome 6: Consumers do not face unreasonable post-sale barriers imposed by firms to change product, switch provider, submit a claim or make a complaint.

"As impoverished investors, we are facing huge post-sale barriers, to the point where we are having to fund expensive legal action just to get information about this current offer before we are forced into a decision."

(Source for stated outcomes: FSA)