Nutmeg ordered to pay ex-client for ‘irritating’ mistakes

The Financial Ombudsman Service has ordered Nutmeg to pay a former client for “numerous mistakes” surrounding direct debits on his pension plan that were likely to cause irritation.

UK Ombudsman faces grilling after TV exposé

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The client, known as Mr M in the FOS decision, first contacted Nutmeg on 6 March 2017 about his direct debit, which he then made a complaint about two weeks later when the issue had not been resolved.

Due to its mistake, Nutmeg offered to waiver three months of the annual management charge (AMC) of 0.75% on the portfolio, which was over £80,000 ($108,672, €90,687).

While this was agreed on 20 March 2017, Mr M noticed three months later he was still being charged. He contacted Nutmeg, which offered an additional three-month waiver, agreed on 30 June 2017, but by November he noticed he was being charged again, despite the agreement to waive a total six months of fees.

Nutmeg acknowledged its mistake and agreed to waive an additional nine months of charges on top of the three months it had already dropped in the period between June and September 2017.

Nutmeg said the value of the 12-month AMC was in the region of £600, but Mr M did not agree with the offer made and complained to the FOS.

An adjudicator determined Nutmeg should pay an additional £250 for the trouble and upset caused, but the robo-adviser disagreed with the sum and the issue was referred to the ombudsman.

Irritating

The ombudsman said Nutmeg should have addressed Mr M’s concerns the first time that he raised the issue of the direct debit.

It would have been “especially irritating” for Mr M to that Nutmeg repeatedly failed to waiver his AMC despite having agreed to do so, the ombudsman determined.

They said the 12-month waiver was appropriate, but noted Mr M transferred away from Nutmeg in February 2018, midway through the period. As such, waiving the 0.75% charge was now worth about £300, the ombudsman said.

However, the ombudsman said due to “numerous mistakes” made on Nutmeg’s side, the additional £250 proposed for trouble and upset experienced was appropriate.

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