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Claim jumpers

Now is the time to fight back and stop claim firms walking all over us

Ihate to keep banging on about it but when something is so wrong it wakes me up at three in the morning, I have to purge myself in the best way I know. Bizarrely, though, one issue that has been depriving me of sleep lately concerns an area of business we have hardly ever touched in all our 21 years of advising and that is endowments.

I know that lots of endowments were missold and that even more were the subject of salespeople who could not believe their luck at such a lucrative and easy line of work they magically found themselves in but when decent and honest advisers are being brought to book for no good reason, my blood starts to boil. We are a resilient lot but I still cannot let some recent “advertising” go unmentioned.

On a recent trip abroad, I had the uncomfortable experience to happen upon an ad in an airline magazine called endowment crisis. I managed to uncover at least two blatant lies designed to fool the unwary. For example, they state, under the heading of: What can you claim? that “the money is sitting there waiting to be claimed”. I am sorry but where exactly is it sitting? If that is the case, I will have some, please.

They then go on to extol their very “reasonable” charges. However, they do not charge any fees whatsoever. No, they just charge 20 per cent of any compensation paid plus VAT.

Just as well “there are absolutely on (sic) other fees or charges”. Phew, that is okay then. For a minute I thought they were going to charge even more, especially as it would be free if you did it yourself via the “usual channels”.

Now, I do not mind being accused of something as long as someone can back it up with facts but when I have to prove we are innocent in response to a clear attempt at fishing, someone is making an arrogant V sign in the face of natural justice. If it is this clear that the methods designed to weed out mis-selling are so flawed, why can’t we change it? What exactly do the FSA and the FOS not understand?

But it gets worse. For one case we had to rebut, having established that the claim company had been fishing, we presented them with a bill for our wasted time (not to mention recompense for the slur on our character) and the invoice was promptly sent back for “cancellation” with a good measure of disdain thrown in for luck. They waste hours of our time without the merest hint of due diligence at the original case and they can get away with being able to tell us to “go away”.

But if you are looking for irony, look no further than another example of shady practice among claim firms. I recently completed an online questionnaire to see if I could claim compensation (for research purposes) for my own endowment (I could, of course). A few weeks later, I got an email asking if I wanted to sell my endowment just in case I was considering surrendering it.

Apparently, if it is not quite rubbish enough to claim compensation, perhaps some other hapless fool will buy it off me. Now I know it is simplistic to say this but if it is good enough for some other poor soul to buy, why isn’t it good enough for me? I reckon there is a bit of a clue there if you look hard enough.

If we have all allowed ourselves to be left open to this sort of abuse, we have only ourselves to blame. Now is the time to fight back and make sure claim firms do not walk all over us. But I also have to admit a certain amount of good-natured schadenfreude directed at the FSA with its battle over its occupational pension scheme mess. Perhaps it will understand how it feels to be accused of something it did not do or am I just completely muddled?

Tom Kean is compliance officer director at The Analysts


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