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Chasers disappearing with payouts

The financial services industry has been hit by a plague of ambulance-chasers which are running off with advisers’ compensation payouts to customers.

The claims management sector’s voluntary watchdog, the Claims Standards Council, says it has been inundated with complaints about claim management firms which enter the market and then disap- pear with their customers’ compensation.

CSC policy director Andy Wigmore says rogue firms get their customers to sign contracts entrusting them with the compensation paid out by advisers or providers.

Some firms only remain in the market for long enough to net a few compensation payouts.

Wigmore says these firms are going unpunished as the CSC has found it impossible to track them. But he hopes the introduction of statutory regulation with the passing of the Compensation Bill will make life more difficult for these firms.

He says regulated firms will have to be VAT-registered and will be easier to monitor.

The CSC is mooted as a strong contender to assume regulatory control.

Wigmore says: “Under regulation, there will be zero tolerance of claim management firms touching customers’ money. This practice cannot continue.”

Adam Samuel Training & Consulting principal Adam Samuel says: “Advisers and providers worried about claim management firms running off with their compensation should write two cheques, one to the customer and one to the claims management firm.”

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