The Financial Ombudsman Service is concerned that claim management companies are continuing to submit incomplete and inaccurate complaints on behalf of investors as it tries to weed out spurious complaints.
The FOS says it has done a lot of work with claim firms to address spurious complaints and cites examples where claim firms have submitted payment protection insurance complaints on behalf of customers who did not have a PPI policy.
It says it is beginning to see a slight reduction in those cases but continues to come across CMCs that are failing to submit complaints to the FOS with accurate and relevant information.
The FOS spokeswoman says: “We do have cases where claim firms have not given us the right information, which we have spoken to them about on a number of occasions. We are continuing to work with them to try to sort that out.
“There are expectations on CMCs and if a case comes to us with no information or without the right information, we will send it back to them. We would expect firms to provide the relevant information when submitting a case.”
Last week, Highclere Financial Services partner Alan Lakey wrote in Money Marketing that a CMC has drummed up two mortgage endowments complaints against him without his clients’ knowledge.
This prompted a flood of comments on the Money Marketing website from advisers who have had similar experiences.
Lakey says: “CMCs do not care about the quality of advice but just want their cut. I would like to see claim firms kicked out of the industry where it emerges there was never any complaint to answer.”
Claim firms are regulated by the Ministry of Justice.
A spokesman for the MoJ says: “We have made it very clear to businesses that we take a zero tolerance approach to any malpractice or attempts to take advantage of consumers. CMCs should remain in no doubt that if they breach the rules they will be closed down.”