Back in the intense project of implementing the then new General Data Protection Regulations (GDPR) requirements I remember wondering if the removal of a fee to complete a member data Subject Access Request (SARs) would lead to a significant increase in volumes. Volumes were important as they defined whether the production process would be automated or not. To be fair the pre GDPR SARs fee was pretty minor and had remained at a flat level for some years. At the time, we needn’t have worried because volumes remained low. Given the data various organisations now hold on citizens the SARs facilities are important - of course this principle predates GDPR’s implementation.

What perhaps we didn’t think about back then was organisations might see an opportunity to commercialise SARs. This sounds a strange concept, but the industry has seen the early stages of claims companies using SARs as a device to support investigations into transfers. Now none of us would argue an individual who has been given poor advice around a transfer of benefits shouldn’t be able to seek justice, and as I have already said SARs are an important tool to protect data subjects. This is however, a new and perhaps unexpected twist.

So how does it work? Well the claims companies approach a member and seek authority to investigate a transfer. One might expect the focus of any investigation to be on the receiving vehicle, or the organisation or person who gave the advice. The truth however is, because many of the transfers being investigated may have happened years ago (though perhaps post the infamous pensions review period of 1988 to 1994), the advice provider may no longer be in the picture. This is highly likely given the changes to the IFA market over this period.

In the 25 years since the Pensions Review, there have been a large volume of transfers and given some of the commentary from the FCA around the quality of advice given to transferees since the introduction of Pensions Freedoms and the risks of scams perhaps we shouldn’t be surprised at this development.

So, where do the claims firms look? Well the ceding scheme is probably one of the easiest parties to trace, the member might not always remember who gave the advice or where indeed the money was moved but they usually remember where they worked and therefore the scheme they were originally a member of. This seems to be where the claims firms are directing their efforts with what can be very substantial requests for data. My own organisation hasn’t been the subject of much of this activity yet, but I hear rumours of cases where providers have had to spend 15 hours per case digging out old records and collating the information requested.

Now the SARs may be free to the member but if these kind of requests happen in any volume the cost of production will not be immaterial. Some administration firms may provide these facilities within fees to schemes though (dare I say it) not within their cost modelling. Other contracts will charge for all of this work. Some others may not appear to charge for the work, but the activity could lead to volume activity caps being breached. Ultimately, if it happens in volume someone will have to pay and the administrator’s ability to absorb it will be pretty limited.

So what should a scheme do if it is subject to approaches of this nature? As the claims firms are pursuing the cases on the member’s behalf, the scheme might want to liaise with the member and validate the relationship between the ex member and the firm . Some providers have done this and found the request subsides at this early point. Whilst I’m no expert on the business models of claims firms, I imagine they identify low hanging fruit where the costs of investigation are low relative to the benefit obtained. If the trend grows in volume then I guess the claims firms themselves and indeed the ceding schemes being asked for data might want to agree standard approaches, which might make it easier and more practical to deliver.

Ultimately, there is no such thing as a free lunch or indeed a SAR and as I have said a member on the wrong end of an unfortunate transfer needs the ability to seek restitution.

Paul Sturgess, PASA Board Director