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Alan Lakey: Chasing the claims chasers

It is time for the Ministry to act as complaint management companies are coming up for more innovative ways to fish for new cases.

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Like malignant locusts, claims management companies are the financial services equivalent of a biblical plague. They have multiplied, mutated, grown fat and spread principally due to the interminable PPI saga and, like other parasites, they search anxiously for targets anew when their current host shows signs of decline.

Collectively they may be lower than a weasels belly but they do exhibit a form of primitive nous which is best characterised by their ability to appeal to the baser natures of the weak, greedy and opportunistic. They have readily grasped that dubious advertising entreaties are capable of encouraging complaints from the avaricious and the unwitting and they know that, like flinging mud at a wall, some of it will stick.

More importantly they know how to play the system, how to use the Financial Ombudsman Service and the FCA rulebook, both of which contrive to allow such abuse.  Consequently CMCs persistently threaten to escalate complaints to the ombudsman, frequently using invective.

The FOS is free for consumers (and those standing behind them) and enables CMCs to toss cases at the FOS with impunity. They know there is a chance that files may have gone astray and they also understand that the FOS’s inquisitorial remit greatly increases the chance of a win. Moreover they are aware that the quality of adjudications is frequently deficient which serves to make it a pretty good gamble. After all, we would all like a bookmaker to offer free bets with a better than 5/2 chance of winning.

A further unsavoury aspect is that CMCs can embellish, invent, lie and practice all manner of deceit without any prospect of censure. The MOJ seems powerless to stop these antics and the FOS will never accuse the claimant or the CMC of lying. Nor will it report them to the fraud squad as it states that such actions are not within its remit.

All of this places pressure on firms to pay up rather than absorb the costs of investigation, regardless of the complaints merit. This particularly applies to networks as their members, unlike directly authorised firms, will not benefit from the FOS’s 25 annual ‘free’ cases.

Many CMCs advertise for investment, pension and mortgage mis-selling cases using ambiguous phraseology which is designed to capture as many responses as possible.

These often home in on the defunct direct sales firms in the knowledge that files may have gone astray – in other words, easy pickings. The mortgage focus is on the closed sub-prime and self-cert lenders where a potential lack of files, and the possibility that the introducing broker is long-gone, makes the prospect of success a tad higher.

The latest example of artfulness is use of the Data Protection Act.

One adviser recently received two Subject Access Request demands for clients’ mortgage files, each accompanied by a cheque for £10. This is a blatant example of ‘fishing’ where the CMC aims to find some error within the file or some piece of evidence that can be used to instigate a complaint.

This particular CMC takes an upfront fee (which it states as refundable if the claim fails).

I am aware that the MOJ takes a dim view of upfront fees and this action, in combination with the unashamed trawling for non-suitability, should indicate that punitive measures are required.  Over to you, MOJ.

Alan Lakey is partner at Highclere Financial Services

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Comments

There are 27 comments at the moment, we would love to hear your opinion too.

  1. And still no explanation has been or is ever likely to be provided as to why the FSA shucked off onto the MoJ responsibility for regulating CMC’s. The MoJ just doesn’t seem to have a grip on the situation or the ability to get one.

    My guess is that the FSA didn’t want to be distracted from steamrollering through its massively embellished RDR agenda, allied to not wanting to be in the position of having one foot hard down on the throttle pedal of encouraging all and sundry to complain and the other on the brake pedal.

    Plus, of course, the current feeding frenzy on the part of CMC sharks wouldn’t have come about if the FSA had started years ago to take action to stop the banks and other lenders from running amok mis-selling PPI in the first place. So, as a result of regulatory negligence, PPI mis-selling was allowed to reach epidemic proportions and now we have an epidemic of opportunistic, unscrupulous and barely regulated cowboy CMC’s whose disregard for any semblance of the truth frequently knows no bounds.

    Does the FSA consider this to be in any way a remotely satisfactory state of affairs or is it yet another of those unintended consequences, the burden of which falls onto everybody else’s shoulders?

  2. Alan Laskey seems to find all the blame for the claims that have been brought by CMC’s falling on the shoulders of the CMC’s. No mention is made of the scandal of PPI miss selling both by brokers and lenders directly which was predicated in them charging up front fees to unsuspecting borrowers for worthless insurance products.

    It is true that there is bad practise in the CMC industry but in comparison to that in the Financial Services Sector it is miniscule. The miss selling of financial products and the money made by the industry from them has been going on for 30 plus years but only since the advent of the FSA/FCA and the OFT have the sellers at last been brought to book. There are more scandals to come as the consumer with help unpicks the web of deceit spun by the financial services industry.

    Finally one real scandal is that because so many brokers have avoided their claims by going out of business and letting the FSCS pick up the tab, when the real culprits the banks and lending companies who financed these product sales and pleading mea culpa, not our fault. Well let me put this as clear as I can, it was the fault of the financial services industry and as for future claims you have only your collective selves to blame.

  3. @ David Souther

    Your comments fail to hit the mark because they fail to address the points made.

    CMCs portray themselves as modern day Robin Hood’s and make statements such as, “we really want to give you back the money that financial institutions illegally took”.

    The reality is far different – they lie, invent, misrepresent and practice fraud on an unprecedented scale. In what other industry could a business set up and produce a tissue of lies with a view of extorting £000s from the victim and not be immediately arrested and gaoled?

  4. Your complaints about CMC’s are at best disingenuous. Had the financial services industry been honest and just paid people their money back without trying to defraud them a second time there would have been no claims industry. The numbers of banks and brokers who lied and defrauded client’s when selling these products are legion. Are you suggesting that client’s with a claim should not claim ? There are tens of thousands of people who had legitimate claims refused and who have been helped by claims management companies to recover money from the sellers of these products. Yes CMC’s have charged and made money out of helping consumers but had the financial services industry done the descent and honest thing no claim would have ever been brought.

    The answer to your final question about what industry could be set up ……….the entire banking and financial services industry has been doing this for years.

  5. @ David Soutter

    Hardly disingenuous.

    You seem to be confusing the antics of the banks with the non-antics of financial advisers.

    My point has nothing to do with PPI in any event. PPI was the galvanising prompt that created these charlatans and schemers disguised as social workers.

    Forget your prejudices and your vested interest stance the matter under discussion is the ability of CMCs to use the system to commit fraud. Receiving a letter from a CMC stating that the client has been mis-sold a PPI and listing eight specific crimes is clear fraud when no such sale took place and the particularly when the complainant never made such an allegation.

    Fraudsters should be in gaol and if the MOJ cannot stop them then perhaps we can by individual legal action. Let’s see.

  6. Alan,

    Although I may agree with some of the points you raise particularly concerning the lack of regulation of CMC and the unfairness of the charging structure of FOS, I would encourage you to think about language that you sometimes use when discussing this subject.

    Our profession is not blameless and we do have problems that need to be addressed e.g. PPI, pension transfers done without adequate explanation and just bad customer service. If I was a consumer reading this article I would be shocked at the attitude of professionals who seem to think that consumers have no rights.

    As for your comment in respects to files gone missing, well if you do have a client who complains what defence can you have if no file exists.

    CMC are reality in modern financial services and if your campaign is for better regulations and indeed better training you have my full support. It even have my full support for changing the funding structure of the FOS but we as professionals need to start acting and speaking like professionals and the article above does our profession no favours. You may think that by using language like this you making the article read more entertaining but in fact you are not giving the impression of a professional who really is campaigning for better regulation.

    “Like malignant locusts, claims management companies are the financial services equivalent of a biblical plague.”

    I know we have not always seen eye to eye but I think you would get more support on this particular subject if you thought about the objectives and presentation, in my humble opinion anyway.

  7. The so called financial advisors, brokers, mortgage advisors call the intermediaries what ever you like where just as guilty of miss selling as the banks. The suggestion that there are lots of fraudulent claims is absurd but I accept that there are lots of claims made where had the financial institution done the right thing and said there was a sale of a particular financial product then the numbers of supposed fraudulent claims would have been reduced. The financial services industry would have done better to have not sold these worthless insurance products instead of sitting on the side-lines whinging about how all unfair the process is.

    If anyone should go to jail it is those people who sold these worthless financial products. The bigger companies have been fined millions for selling ‘crap’ or rather selling totally worthless financial products ……..now that really is fraud and has anyone gone to jail………No

    Your suggestion that fraudsters should be in jail is absolutely true but then people who live in glass houses should not even pick up stones never mind throw them.

    Finally I note you have not mentioned the real victim in this financial mire……the client, but then they have never featured highly in the financial services list of concerns. Oh except as a hole-in-the-wall cash machine !

  8. Perhaps in a spirit of conciliation I could challenge Mr Laskey to a public debate about the industry the role of IFA’s banks and the involvement of CMC’s. We could hold this in London or anywhere that’s suits ??

  9. MR Lakey, sorry for the miss spelling

  10. We need to get back on track here.

    The article focused on the ease with which claims management parasites are able to attempt and succeed in committing fraud against firms and insurers.

    I know of insurers who pay out if the claim is below a certain level as it is cheaper than investigating.

    On a personal level I will not allow any such parasite to defraud me and I will charge them for wasting my time in defending myself against fraudulent attempts.

  11. I assume you reject my suggestion of a public debate as far as the part of the industry I com from I have nothing to hide having run claims on a defensive basis for over 15 years. I think it is a shame that Mr Lakey dos not feel confident enough in supporting his own industry to defend it in the glare of the public spotlight. Let me extend the challenge to Money marketing to be included in the matter.

  12. There seems to be a classic case of two opposing views that refuse to yield any ground. As with life this is not a black and white argument.

    @Alan Lakey – I agree that the it is far too easy for CMC’s to fish for potential claims by cold calling, emails, texts or less than honest TV adverts. These companies don’t limit themselves to PPI miss-selling either but that is another debate. However, PPI was miss-sold and the financial services industry hasn’t exactly covered itself in glory.

    @David Soutter – As Alan has done with CMC’s you have tarred the entire financial services industry with one brush. Yes banks miss-sold PPI, that is a fact that they are paying heavily for but they are also paying heavily to clients who knew what they were taking and now due to a CMC or the press are chancing their arm at getting some money back. To state that all policies were worthless is simply wrong, many clients have actually made claims on these types of policies. There are many IFA’s and (ex)bancassurance advisers who have only ever acted in the best interests of clients.

    Peter Herd is correct CMC’s are now a reality that all businesses have to be wary of. Some do an important job of informing clients that they are entitled to a claim and helping them to make that claim but a significant chunk of others frequently flaunt rules and commit ‘fraud’. Both sectors need to do some constructive PR in the eyes of the public and the only way to do that is to clean up their act and conduct themselves in a more professional manor. As an IFA i know i am willing to do this, not knowing any CMC’s i can not speak on their behalf.

    All the above is my humble opinion only.

  13. @David Soutter – As Alan has done with CMC’s you have tarred the entire financial services industry with one brush. Yes banks miss-sold PPI, that is a fact that they are paying heavily for but they are also paying heavily to clients who knew what they were taking and now due to a CMC or the press are chancing their arm at getting some money back. To state that all policies were worthless is simply wrong, many clients have actually made claims on these types of policies. There are many IFA’s and (ex)bancassurance advisers who have only ever acted in the best interests of clients.

    Yes there is a tarring of the financial services sector with the same brush. I accept that there will be firms that never sold any dodgy financial products, but very few. There have been so many scandals that the sector has rather tarred itself and responses from Mr Lakey in the way he has phrased his article is not helping. That is why the suggestion of a meeting in the open to address all of these issues should be accepted.

    The FS industry has gone out of its way to tar the CMC sector by lumping them all together. Its strange that PPI has been put in with PI but it is, as companies are in a sort of collective. CMC’s have been blamed for call centre activity when they (95%) don’t run call centres and only ‘buy’ leads from them. The ICO has had it in his power to close the call centre activity down but it generates too much revenue and creates many jobs. CMC’s by enlarge don’t cold call, just like the insurance and banking sector don’t cold call. Perhaps what I am saying is we all deserve each other !!

  14. To Alan
    Is it helpful to call CMC “claims management parasites”?

    Whatever you’re feelings towards this type of company using this type of language within the article or blog response in my opinion does not help our profession. If we do have a legitimate concerns about CMC’s put a rational argument together of how to improve their services and indeed ours. As I mentioned earlier claims management firms are only a symptom and a reaction to bad service from financial services firms. The profession is not blameless and your article reads as if there are no faults within financial services which is clearly untrue.

    You can stomp your feet all you want but the vast majority of the general public and indeed I would say some of the people in financial services do not necessarily agree with you, particularly using such negative language.

    Do consumers have rights? The answer to that is yes and if you don’t like that particular answer maybe it is time to get out of financial services.

    Campaign for reform of how CMC’s are regulated and come up with a balanced argument rather than seeking an angry exchange just because somebody criticises you.

    To David

    I also believe that your viewpoint is unhelpful to the CMC profession as it seems to suggest that all financial advisers and firms have miss-advised clients. This is clearly untrue and I would totally agree with Alan on one point that some CMC are clearly acting on a fishing exposition instead of putting in legitimate claims.

    It is obvious to me that FOS needs to be reformed so that a greater share of fees are paid up front by CMC to reduce the potential for bogus claims. If a claim is up held then these fees would be refunded. I like many financial advisers have no problem with legitimate claims but take exception to companies that refused to sign up to a code of conduct and also do not take into consideration what is reasonable advice.

    Until we bring back the principle of reasonable advice the cost of receiving advice will carry on rocketing to the detriment of the consumer. If that is what the regulator wants them fair enough but many IFA’s like myself do not only service wealthy clients we also service normal hard-working consumers and would like to carry on doing so. This job is difficult enough without companies deliberately not adhering to the rules and that includes both financial firms and CMC’s.

  15. I agree with Peter Herd on this.

  16. @Alan Lakey

    Why would you believe a consumer exercising their right under the Data Protection Act is inappropriate. Surely an adviser who had given good advice and kept records appropriately would much prefer to meet their obligations under the DPA and provide a subject access request than be the subject of an unjustified complaint ?

    I am also somewhat surprised that you appear to suggest that knowledge of the FCA rulebook is a bad thing.

    However I agree completely that FOS is not fit for purpose – the key reason for this is that the larger lenders defend the indefensible in the hope the consumers with valid complaints give up at the initial rejection stage. We have one case at FOS where the lender admits the consumer was not eligible for the product (and the information on the application form shows this) yet still defended the sale !

    Tactic like this have forced FOS to take on huge numbers of unqualified and inexperienced staff. Five years ago when a PPI case went to FOS we would receive an adjudication and whilst we may not agree the outcome it had generally been investigated thoroughly and you could follow the argument made by the adjudicator. Now we are lucky if the cut and paste paragraphs relate to the same lender and same gender of consumer throughout. Aside from the risk that some valid complaints are rejected there is as Alan says an incentive to throw everything at FOS as there is a reasonable chance of complaints being wrongly upheld.

    I would also add at this point that certain lenders are hell-bent on not responding to complaints and often referral to FOS is the only chance of obtaining a response.

    I agree with Peter’s comments above that upfront fees for CMC’s at FOS are the way ahead and that the case fee should be substantially higher for all parties – this would discourage spurious claims from CMC’s and equally importantly discourage spurious rejections from sellers. The knock-on effect should also be that FOS had less cases to deal with and could invest more time in undertaking a better standard of investigation.

    Those that would benefit are sellers who have sold appropriately, CMC’s who are acting professionally and most importantly consumers. Those who would lose out are those that neither industry would shed a tear over.

  17. @CMC Manager – A well argued case which I am a loittle dissapointed you are unwilling to put your own name to.

    As to the access report, I would disagree however in that morally you should be required to state the nature of your complaint first before going on a general fishing exercise for errors as the stupid system required by the FCA means there is bound to be some procedural issue you can find fault with for. most cases.

    With regard the case where the lender agreed a package the consumer wasn’t eligible for, please clarify. Does that mean they got a mortgage outside the lenders standard terms or were sold a chargeable insurance they could not benefit from as my opinion and response would differ accordingly.

  18. To David and CMC manager

    This isn’t about individual cases this is about having a workable system that is fair for all including the consumer.
    In respects to the data protection act it is clear that all IFA’s and financial firms have a clear responsibility under the law to disclose all computerised records and relevant paperwork in connection with a sale. This is the same law that entitles and individual to receive a copy of their medical records from a GP and unfortunately is a price of doing business within financial services.

    One of the things that were missed in my original comment is that I mention reasonable advice. The present regulatory stance on giving advice is that if you miss a paragraph or in fact supposedly forget to mention one key piece of information out of 20 key pieces of information this entitles a client to compensation. I person believe that with the amount of information that is issued to clients e.g. key facts illustrations and personalised letters we should work on the basis of what is reasonable.

    Is it reasonable that an individual sold an equity linked investment would know that that investment could go down as well as up particularly after receiving all of the above information? My impression that is yes it is reasonable to believe that the client understood that the investment had risk and therefore client cannot complain if said investment goes down.

    There is exception to this where the products sold is heavily promoted and sold on the basis of having a guarantee and was later found not to be valid e.g. Key Data.

    Financial Services always gets this wrong as it’s not the fact that advisers don’t advise clients correctly it’s the fact that product providers and some advisers choose to be lazy and highlight key phrases like guaranteed rather than concentrating on important things like risk.

    As already stated our profession does have its fair share of rogue practices and the only way we can improve our profession is to work with regulators to stamp out those practices. Often when I read articles in money marketing from people like Alan it seems that he comes across that nobody in financial services has done any wrongs whatsoever well that is clearly wrong.

  19. Phishing expeditions using SARs are wrong.

    Mr Claims Manager you need to have a look at the MOJ website which states that it is an unacceptable practice that places financial firms under tremendous strain.

    I have little sympathy with banks and serial PPI mis-sellers but let’s get one thing clear – the offenders are not advisory firms yet we have to suffer the ministrations of fraudsters dressed up as CMCs intent on trying it on and looking for some reason to complain.

    What a sick society. The very existence of CMCs and the fact that some will seek to validate their underhand methods is symptomatic of such a society.

    And, Mr Soutter, I am more than happy to engage you in open debate.

  20. A simple way to handle a SARs request when no complaint has been made is to offer to destroy all data there and then, especially if a time bar or the lomgstop has past.

  21. @Philip Castle
    In common with a number of posters on here I do not put my own name to my comments because they do not always agree wholly with those of my employer.

    When we make a DSAR, this is never done as a phishing expedition and although there is no requirement to do so we state exactly why we are making the request. If the firm can supply the specific information without having to copy and produce all its records and charge the fee this is clearly in the best interests of all parties

    In terms of the case where the customer was ineligible, this was an ASU PPI product on a credit card and their application form confirmed that they were not in employment.

    @Peter Herd

    I agree that any investigation into a complaint should be holistic and look at what is reasonable given all the circumstances. The failing with many of the large lenders and FOS is the tick-box & flow chart complaint process that allows inexperienced “investigators” to come to a conclusion regarding a product that they do not fully understand, defending or upholding a complaint on the basis of whether or not the correct box was ticked. We again go back to the root cause that the volume of complaints in the system is too large for them all to be handled correctly within the statutory timescales due to some CMC’s and lenders pushing complaints to FOS that should never be there. Perhaps a FOS case which has a multiplier of the percentage of upheld complaints involving an organisation over the previous 12 months for the product type in question would be the way ahead e.g the case fee is £3,000, if your uphold rate is 5% you pay £150 if its 90% you pay £2,700 (with the losing party refunding the winning party on completion)

    @Alan Lakey
    I completely agree that phishing expeditions using SAR’s are wrong. We would use a DSAR in significantly less than 1% of cases, usually where a client was unsure whether a product was sold or who was responsible for the sale. Many clients who have been mis-sold products are not those who regularly actively manage their finances and seek advice and often have quite poor record keeping. Whilst I (and I’m sure the vast majority of posters on this forum) are well aware of what products they have bought, when and from who this is sadly not the case across the population as a whole.

    Your references to all involved in the Claims Industry as Fraudsters is wide of the mark. Whilst all industries have an unprofessional side, and I would certainly accept that Claims Management attracts more than its fair share of undesirables, tarring everyone involved with the same brush detracts from rather than enhances the valid points that you raise. I also take offence at your suggestion that I either engage in underhand methods or seek to validate them and ask that you either justify or withdraw the comment.

  22. CMC Manager, you should not be afraid of saying who you are. The CMC industry is not very good at defending itself against unfair and unwarranted attacks. I was challenged on here over my tarring with the same brush all the financial services sector. I have to say that in my personal experience the sector is rotten to the core. That does not mean to say that everyone who works in the sector us just the vast majority of it.

    Example; A tied broker part of one of the big three insurance groups selling mortgages in the sub prime sector using his firms mortgage code. His insurance company would not deal with these sub prime companies. The subprime mortgage companies knew he was outside the regulation but still granted the mortgages, the insurance group pretended they knew nothing, it was an accident (five applications for the same client) Sold mortgage which was wholly inappropriate for the client. Gone to FOS as everyone else washes their hands of it and the broker himself retired having become insolvent.

    There are rogues in the CMC industry but in comparison to the Financial Services sector they are mere amateurs. It is interesting that the person I challenged Mr Lakey to an open debate about these matters has ignored the challenge as has Money Marketing and the former has gone quiet as well !!

  23. @CMC- It looks like you are one of the good CMCs and a pity that you can’t therefore use your own name as it needs people like Alan Lakey to be critical of where faults occur with CMCs and people like you to raise the bar form others and explain and agree good practice.

    @David Sputter – It is a pity you have had those experiences of advisers (mortgage advisers fro. what you have described, who unlike investment advisers are not I dividually registered) .
    Alan Lakey has offered to openly debate with you. He Isa good honest chap and has had a lot of spurious attempts via CMCs (I have not, due to my client type and. umnbers), but were I him I might be tempted to use claim chasers and other derogatory terms which I agree may not be helpful especially when there ARE good CMCs out there.

    I have referred to some F pack staff as shysters based on my dealings with them, which may not be helpful, but that is a wikipedia description of how they dealt with me and I am awaiting a response from the F pack to the complaint I made as a result and the FOI request it has caused too.

  24. We appear to have the 2 ends of the spectrum in this discussion, Alan, a man who has clearly had some bad experiences with CMC’s and David who has clearly had some bad experiences with mortgage brokers.

    As a CMC i tend not to agree with either. Alan I cannot agree with you as you are tarring the whole industry with the same brush. I dont think you are talking about PPI but clearly sold a lot of endowments in the past. These proved not to be great products, but at the end of the day were easy sales in the good times. And if you disagree with me, how many have you sold in the last 5 years?

    David, i think your tarring of the whole FS industry as corrupt and rotten to the core is equally blinkered. You are going for sub-prime lenders and snake in the grass mortgage brokers (of which there were many), but that doesn’t mean the whole FS industry is corrupt. Mortgages and sub-prime lending is but a small part of the industry and the vast, vast majority of IFA’s are not ‘fly by night, only deal in the good times’ sort of people – and Alan I do not include you in these sort of people, despite my comments.

    However i think there is one thing that, Alan, David and all can agree on – the FOS is incompetent and woefully inadaquate for the job. The sooner the FOS stop tick boxing and start making proper decisions the better. At the moment the banks may as well reject, the FOS may agree and the CMC’s may as well take to the FOS as they may equally agree with them. When the FOS get the clients name, sex or even the company they are complaining about correct more often the more people will respect them, at the moment they are complete joke that dont know if Mr is a man or a woman.

  25. @ David Soutter – I think you should read Alan’s comment of 8/10/13 @ 4:57pm

    As an IFA myself and a member of a Network I can tell you that it really hurts when a CMC has taken a case to FOS where clearly there has been no case for us to answer but yet we still get hit with a £900 case fee for the pleasure of being found innocent as the CMC weren’t happy with the “not upheld” response from our Network’s complaints team.

    I sent a letter to the CMC in question, with the aid of my solicitor, and asked them to acknowledge the letter within 14 days and provide their full response 14 days later. 22 days later and I haven’t even had the decency of a reply!

  26. I Sat a CII exam yesterday and it was interesting to speak to non investment examinees as to their experiences and UNDERWRITERS were telling me of fraudulent claims which the FOS have forced insurers to pay out on when they have even accepted that the claimant has already been paid out on 3 fraudulent claims, but apparently paying out on three previous frauds means the insurer must pay out a further £80k fraudulent claim. It would not stack up in court and we are not talking about peanuts here and people wonder why insurance premiums are so high.
    The FOS is a severely broken system which is encouraging fraudulent activity as the complainant cannot loose and few pursue the fraud attempts.

  27. Alan,

    I have one question for you and it’s not necessarily related to financial services.

    Do you believe that the customer has the right to complain?

    Reasons why asked this question is that through several articles over my time contributing to Money Marketing I seem to have the impression that you don’t believe that clients do.

    I think we all agree that the majority of the complaints over the recent years have come from the banking industry due to the fact of senior managers not putting in place relevant controls when writing financial services product sales. Obviously the biggest of these errors was PPI but I’m sure over the next few years there are going to be others.

    The fact is writing business on a mass scale while not realising the potential complaints problems later down the road is very dangerous and I personally believe that we going to see a number of complaints from limited advice services or execution only where clients will successfully claimed that they have received advice.

    Many of the scandals within financial services come about by poor decisions taken by managers and senior executives are not necessarily the salesperson fault. Poor training, poorly designed incentive schemes, and lack of customer focus are at the heart of every single miss-selling scandal.

    Yes there is fraud on behalf some CMC but until we address issues within financial services and raise the professional standards within the profession CMC’s will continue to be a reality. My advice to you would be to campaign for better training better professionalism and most importantly higher ethical standards by CMC and Financial Services firms

    IFA’s are not exempt from consumer rights and although we may have a low complaints history we cannot and should not be giving the impression that clients don’t have rights.

    In fact I will take exactly the opposite view to what you often betray and that is that if consultants or senior managers are found to have high complaints histories or found responsible for mass miss-selling than those individuals should be held accountable. In the worst situations you could argue that these people should be put on trial for fraud a good example of this is PPI, where somebody at board level must’ve made a decision to sell a product they knew would not necessarily cover individuals. This after all is fraud plain and simple and surely it has come time to stop calling it miss selling.

    Finally, if you are claiming there is widespread fraud in carried out by CMC than as a consumer what would you say of those financial institutions that knowingly sold products that will not fit for purpose. I could argue that that is fraud as well!

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