My last column highlighted the activities of a claim management company and I have heard that other advisers have suffered problems.
This is a significant matter. Instigating claims by telling a consumer that the insurer will pay out is a tried and trusted method for these parasites and it may be that little can be done about this aspect. However, the next phase is the considered invention of reasons to back up the complaint.
In the two instances I experienced, the charges levelled were specific, such as no fact-find completed, no discussion of other repayment methods and the assertion that the client was led to believe the policy would repay the mortgage.
All these are genuine concerns and, if levelled by or on behalf of a client, they must be investigated and dealt with in line with FSA rules. Nonetheless, in the two instances mentioned, the clients had not made any such accusations. In fact, they had not made any accusations and the first they heard about a complaint was when I approached them for clarification. The claim instigator had fabricated them.
Let’s not forget that the aim is to get the complaint before the Financial Ombudsman Service where its inquisitorial approach just might unearth some reason to find the adviser guilty.
My recent letter to the Ministry of Justice made clear that two provable attempts to defraud my company had been attempted and this implied a major problem with this company. I surmised this would possibly galvanise the MoJ into some form of investigation with appropriate and draconian consequences. Not so.
The MoJ’s reply was a standard template letter referencing payment protection insurance claims. It stated that the MoJ receives many complaints about claim management companies operating within the PPI sector and rambled on about how the MoJ works closely with the FOS and the FSA to improve the handling of consumer complaints. It finished with the assurance that it would “continue to closely monitor trading practices within this sector and use the intelligence gathered to prioritise and target enforcement work”.
Notwithstanding that my complaint had nothing to do with PPI or the handling of consumer complaints, I was hardly comforted by this final promise.
I phoned the MoJ but was not allowed to speak to the letter writer, instead being dealt with by the receptionist.
Having outlined my concerns, I was telephoned back to be advised that my “evidence” was insufficient for them to investigate any further.
This is a very poor outcome, especially as I had purposely not included any evidence within my complaint. I was kickstarting the complaint process and assumed I would then be asked for evidence during the course of the investigation. Others have labelled the MoJ as “toothless”, which seems an overly kind epithet, given the insouciance with which two specific counts of attempted fraud have been treated.
I will take this further with the MoJ and via my MP. Let’s be clear, advisers have to work to the highest professional standards yet we are convenient prey for all manner of fraudsters and opportunists who are enabled to stalk us with impunity. Maybe it will take an action for defamation to resolve the issue.
Alan Lakey is partner at Highclere Financial Services