Disgruntled Paymentshield brokers are forming an action group to recover thousands of pounds of lost commission after the protection provider last month ceased trail payments to intermediaries no longer regulated to sell mortgage-related general insurance.
The group, which will shortly enlist the support of what it calls a “high profile trade figure in the protection market”, is finalising agreements with an unnamed law firm to bundle the claims from the estimated 1,500 agents affected together.
It is being formed by former Paymentshield marketing director Gareth Riding, who left the firm in April 2005, who claims Paymentshield’s action breaches its agency agreements with its introducers as many were never FSA regulated and therefore never signed the new agency agreement under which the provider claims allows it to terminate commissions.
Paymentshield was sold to GI broking giant Towergate earlier this month for a rumoured £180m.
Riding says: “We are going to meet up with a trade figure who is planning to pull together an action group that will co-ordinate legal activity against Paymentshield. It is heartbreaking to see the reputation of a fantastic company like Paymentshield being dragged through the mud.
“If the previous owners were still at the company, every single agent would still be receiving the commission they were entitled to receive irrespective of their status and FSA regulation.”
Paymentshield sales and marketing director Chris Traynor says: “We should no longer continue to remunerate someone no longer authorised after regulation. That is not inconsistent with the life insurance industry. Remuneration is not just about introducing a client it is about managing the client so if people have left the sector they cannot manage that relationship.”