FSA guidelines to deal with chasers
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The FSA is to publish a joint statement with the claim management company regulator, setting out firms’ responsibilities when they get complaints from claim firms.
In a feedback statement on consumer complaints published by the regulator this week, the FSA acknowledges that claim management companies can accelerate the pace at which mass claims grow.
But it says this is balanced against the role that claim firms can play in “improving access to justice for consumers of financial services”.
The FSA says: “Key to this is the value for money that claim management companies offer consumers, given that consumers have access to complaint-handling procedures that are free and intended to be easy to use.”
The regulator also points out that the FSA, the Financial Ombudsman Service and the Office of Fair Trading work closely with the claim management regulator, which is part of the Ministry of Justice, providing it with intelligence about rogue firms.
The FSA adds: “Our joint statement with the claims management regulator will set out a firm’s responsibilities when they receive complaints from CMCs.
“It will also provide messages for consumers to help them consider what they should and should not take into account when deciding whether to use the services of a CMC.”
The FSA and the claim management regulator signed a memorandum of understanding earlier this month.
Paladin Financial Services managing director Tim Purdon says: “What these companies do is encourage vexatious claims. It would be good to have a set of procedures that we can follow when we receive complaints from CMCs. Then again, if the regulators were acting more promptly, there would not be the need for these CMCs in the first place.”
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Readers' comments (2)
Evan Owen | 31 Mar 2011 9:05 am
I agree that some CMCs can and do encourage what you term vexatious claims but not all do. I have seen both sides of this great knowledge divide, I have been asked to defend the odd case of indefensible advice, fend off the opportunistic claims from some infamous CMCs, watched as badly drafted 'template' complaints cause the consumer more problems than they are worth.
Now I see a small number of firms both large and small ignoring 'expressions of dissatisfaction', the fending off of weak arguments from complainants, the FOS being unable to cope with complex claims and the FSCS using a box ticking approach to 'civil liability' rather than acting as the ‘fund of last resort’ as it was designed to be. Don’t get me going on the advertising!
It is a mess folks and it is getting worse, in a perfect world there wouldn’t be any advisers who are incompetent, negligent or downright criminal which would mean the CMCs would be out of work. In a perfect world the regulators could spot ‘trends’ and act promptly, their growing mountain of rules and regulations would prevent consumer detriment but this is a less than perfect world. But it could be better than it is now if only ‘they’ would listen, is it a case of the same old architects always knowing better yet being unable to demonstrate that this is so?
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Anonymous | 31 Mar 2011 10:25 am
If a cmc is encouraging a claim, that claim should be specific. They should not be allowed to send out template letters which say " the policy may have been missold for one of the following reasons"
and then go on to publish a list of endless scenarios, hoping to catch you on one of them..
If a client has a genuine complaint and is not simply "trying it on" because they have been advised that they have nothing to lose, then they should be clear adout the nature of that complaint.
It is not possible to make a complaint to the police on the basis of "I may have been robbed, assaulted, kicked or spat upon" can you please spend lots of time and effort proving none of these events actually happened..
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