The Association of Professional Financial Advisers says it backs advisers’ attempts to seek damages from claims management firms for loss of time or income due to frivalous complaints.
GraingerCo Financial Services owner Steve Foreman successfully took action against a claims management firm after he received a frivalous complaint concerning PPI.
The complaint did not contain enough information to identify the client and the CMC could not provide any further details.
After filing a complaint with the Ministry of Justice, Foreman demanded the claim firm pay him £120 for the time he spent investigating the claim, threatening legal action if it did not oblige. He received full payment within seven days.
Other advisers have contacted Money Marketing saying they intend to take a firm stance in relation to CMCs in light of Foreman’s actions.
Dobson and Hodge financial services director Paul Stocks says: “The limited number of complaints we receive are all via one particular claims management company. The latest complaint has been found to be without foundation and we are considering taking the sort of steps Steve did.”
Apfa policy director Chris Hannant says: “Advisers are perfectly entitled to seek damages for their loss of time and good luck to those that do.
“It is an issue for any individual firm or adviser to consider and do what they think is best. Each firm has to deal with things as suits their circumstances – it would not be for everyone as it takes a fair bit of time out of the day.”
However Hannant says there should not be a need for advisers to chase CMCs for payment in the first place.
He says: “It should not be incumbent on advisers to pursue this because the regulator should be doing its job.”