The FSA is concerned that brokers could be referring clients to claim-chasers without the approval needed to meet data protection rules.
At the Mortgage Business Expo last week, FSA director of small firms and contact centre Lesley Titcomb said the regulator has had anecdotal evidence of an increase in brokers referring clients to claim management firms and of bad practice in this area. She said in one case seen by the FSA there was evidence from the outset that the client’s claim was unlikely to be successful.
Titcomb said: “I would just like to say that if a claim management company approaches your firm, be careful.
“We have seen firms fail- ing to consider their data protection obligations when referring customers without the appropriate consent, others failing to perform any due diligence on the claim manager they refer to, ask- ing no questions about succ- ess rates, the average length of time to complete on a claim and to refund policies where fees are taken up front. We recognise that there are good claim managers out there but, as with any sector, there are poor firms and we expect you to act with int- egrity and to make the fair treatment of your customers central to what you do.”