BBC One’s Northern Justice - Compensation for storage unit scam victim

When Mr Morgan reached the age where he could access his pension pot, he started receiving telephone calls out of the blue, offering him unusual ‘get rich quick’ investments, including schemes involving the Amazon rainforest and Scandinavian hostels.

Preferring something closer to home, his attention was caught by a firm of financial advisers who offered him the chance to buy some local storage units, with the promise of high-interest rates and excellent returns. He checked out the website and brochure, read other investors’ testimonials and was persuaded to make an investment of £38,000.

Mr Morgan was investing in Store First units through a Self-Invested Personal Pension scheme (SIPP). He was told he would receive guaranteed returns of 8% for years one and two, then rising to 10% for years three and four, and 12% for years five and six. Mr Morgan was also told that he could sell the units if he wanted to get his initial investment back after five years.

For the first couple of years, everything appeared to be fine. Lots of money came into his account and he was promised continued growth on his investment. But in year 4, there were no bookings at all for his storage units, meaning he would not receive any income. Worse still, the company started asking Mr Morgan for money to manage, maintain and secure the storage units.

Store First was wound up in 2019 leading to many investors losing out financially, including Mr Morgan. Looking for help, he was referred to TLW Solicitors and was soon speaking to their specialist financial mis-selling lawyer, Alex Laws.

Alex and the TLW mis-selling team gathered all the paperwork relating to Mr Morgan’s investment and initially looked at pursuing a claim against the financial advisers he dealt with. The SIPP file contained details of Mr Morgan’s pension transfer and other fees that were paid out. Storage pod investments are high-risk and unsuitable for many investors, including Mr Morgan.

It became apparent that the financial advice Mr Morgan received was, in fact, negligent, however, the financial advisers who had given him that advice had gone out of business. Alex knew the only hope for Mr Morgan to get his money back was through the Financial Services Compensation Scheme (FSCS). This Government-backed lifeboat scheme was set up to help people whose financial firms have gone out of business and cannot afford to pay a claim.

For an FSCS claim to be successful, it must be shown that an investor has suffered financial loss. In Mr Morgan’s case, as the storage pods were still valued at what he initially paid for them, the FSCS, therefore, refused to pay out. Alex believed that the valuation was incorrect and sought to persuade the FSCS that the storage pods were in fact worthless. She got in touch with an auctioneer who had experience selling similar storage pods – they had only managed to sell one unit and for only 14% of what it had originally been worth. This was the important evidence she needed to show that there was no secondary market for the pods and that the pension provider had to downvalue them.

Alex asked the FSCS to reconsider Mr Morgan’s claim in light of the new valuation and they agreed that the advice he had been given was negligent and the storage pods were now worthless. The FSCS compensated Mr Morgan and he has managed to get his retirement plans back on track with TLW’s help.

Commenting in the programme, Mr Morgan said of Alex and the team:

“They did some significant work on my behalf…fought my corner…she built a really strong case.”

Each of the episodes of BBC One’s Northern Justice series that members of TLW Solicitors feature in can be found on BBC iPlayer.