FOS continues to see inaccurate complaints from CMCs
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The Financial Ombudsman Service is concerned that claim management companies are continuing to submit incomplete and inaccurate complaints on behalf of investors as it tries to weed out spurious complaints.
The FOS says it has done a lot of work with claim firms to address spurious complaints and cites examples where claim firms have submitted payment protection insurance complaints on behalf of customers who did not have a PPI policy.
It says it is beginning to see a slight reduction in those cases but continues to come across CMCs that are failing to submit complaints to the FOS with accurate and relevant information.
The FOS spokeswoman says: “We do have cases where claim firms have not given us the right information, which we have spoken to them about on a number of occasions. We are continuing to work with them to try to sort that out.
“There are expectations on CMCs and if a case comes to us with no information or without the right information, we will send it back to them. We would expect firms to provide the relevant information when submitting a case.”
Last week, Highclere Financial Services partner Alan Lakey wrote in Money Marketing that a CMC has drummed up two mortgage endowments complaints against him without his clients’ knowledge.
This prompted a flood of comments on the Money Marketing website from advisers who have had similar experiences.
Lakey says: “CMCs do not care about the quality of advice but just want their cut. I would like to see claim firms kicked out of the industry where it emerges there was never any complaint to answer.”
Claim firms are regulated by the Ministry of Justice.
A spokesman for the MoJ says: “We have made it very clear to businesses that we take a zero tolerance approach to any malpractice or attempts to take advantage of consumers. CMCs should remain in no doubt that if they breach the rules they will be closed down.”
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Readers' comments (5)
Paul Howard | 2 Dec 2011 9:51 am
"A spokesman for the MoJ says: “We have made it very clear to businesses that we take a zero tolerance approach to any malpractice or attempts to take advantage of consumers. CMCs should remain in no doubt that if they breach the rules they will be closed down.”
Surely, as they are attemtping to commit fraud. they should be prosecuted to the fullest extent of the law?
Not slapped on the wrists and set up shop next door?
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Evan Owen | 2 Dec 2011 11:40 am
This is not a matter of "malpractice or attempts to take advantage of consumers", it is a case of hysteria generated by yet another "come and get your dosh" campaign in the media and of course public announcements by the FSA and the FOS.
Since 2004 I have seen at first hand what firms have to put up with when assisting them with complaint handling workloads which often make them 'wobble' under the pressure from misguided customers and incompetent CMCs, whether it is a direct complaint or one handled by a third party the confusion is rife and of course if the firm tells the consumer or CMC that the complaint is invalid because there is no such product in their name then the FOS will invariably be the next step whether there is merit or not. The day the FOS charges a refundable fee for looking at complaints is the day when spurious complaints will decline rapidly.
I have to say this is the first time that I have seen the FOS use the word 'spurious'!
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Julian Stevens | 2 Dec 2011 11:45 am
What was the reasoning behind CMC's being regulated by the MoJ? I didn't know that the MoJ was a regulatory body. Given the FSA's unquenchable appetite for regulating everything under the sun, one might reasonably have expected it to be clamouring for the job.
Then again, if CMC's are making life even more difficult for IFA's, then it's understandable that the FSA will be happy to stand well back and leave the job of regulating them to the MoJ which, so far, doesn't seem to be doing much of a job.
Oh yes ~ are CMC's required to pay levies to the FOS and the FSCS?
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Steve | 2 Dec 2011 1:42 pm
I had a telephone call from a CMC this week asking me if I had a PPI policy. When I said that if I did I would go straight to the company who sold it to me, due to the percentage they would take from any potential compensation received, I was lied to and said they don't take a fee. CMC's are parasites in my opinion and think nothing about the people they are claiming to help.
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Anonymous | 2 Dec 2011 3:00 pm
The actions, practices, fees etc of CMC's need a full investigation.
I have received letters from CMC's that are identical in content to the previous 30. Funny how all clients seem to have exactly the same issues.
I have had CMC ring me and pretend to be clients.
CMC that escalate cases to FOS before even trying to contact the Lender or Broker first to see if PPI was even taken. Or, taking cases to FOS without even bothering to fully assess cases, for example when our Final Responses are issued we always ask in which format they would like copies of the call recordings sending eg email, disc etc. Its vary rare that a CMC will even ask for a copy call, they just send the case to FOS.
I fully agree with Steve and his parasite comment
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