The trade body for claim management companies has attacked Which? and Money SavingExpert.com for “siding with the banks” after the consumer groups and the British Bankers’ Association wrote to the Ministry of Justice calling for tighter regulation of claim firms.
Last week, the three bodies wrote to Justice Secetary Ken Clarke, complaining there is “significant evidence” of rule-breaking by claim companies and calling for “urgent action” to improve the department’s regulation of them.
CMCs have been criticised for charging clients up to a third of their compensation payouts, when consumers can submit their own claims for free to the Financial Ombudsman Service.
Claims Standards Council policy director Andrew Wigmore claims that the consumer groups should be “ashamed of themselves” for “siding with the banks” and accuses them of trying to deny consumers choice in how they make claims.
He says the MoJ is “extremely aggressive” in trying to stop abusive practices by CMCs that do break the rules.
Wigmore says: “For organisations that pride themselves on consumer protection to side with the banks on this issue is utterly disgraceful. Their current action to protect the banks against the consumer right to make a claim shows breath-taking ignorance and a total disregard for the consumer they profess to protect.
“The consumer is not stupid. They are fully aware you can make a claim for free but they choose to use a third party, someone to fight on their behalf. Are Which? and MoneySavingExpert.com wanting to deny consumer choice? It seems so.”
Which? executive director Richard Lloyd says: “We are calling on the Government to take action that ensures third-party complaint handlers are properly regulated and bad practice is stamped out, so consumers get the compensation they are entitled to. If people representing CMCs do not understand that, it reinforces the need for urgent action by the Government.”