The FSA is to publish a joint statement with the claim management company regulator, setting out firms’ responsibilities when they get complaints from claim firms.
In a feedback statement on consumer complaints published by the regulator this week, the FSA acknowledges that claim management companies can accelerate the pace at which mass claims grow.
But it says this is balanced against the role that claim firms can play in “improving access to justice for consumers of financial services”.
The FSA says: “Key to this is the value for money that claim management companies offer consumers, given that consumers have access to complaint-handling procedures that are free and intended to be easy to use.”
The regulator also points out that the FSA, the Financial Ombudsman Service and the Office of Fair Trading work closely with the claim management regulator, which is part of the Ministry of Justice, providing it with intelligence about rogue firms.
The FSA adds: “Our joint statement with the claims management regulator will set out a firm’s responsibilities when they receive complaints from CMCs.
“It will also provide messages for consumers to help them consider what they should and should not take into account when deciding whether to use the services of a CMC.”
The FSA and the claim management regulator signed a memorandum of understanding earlier this month.
Paladin Financial Services managing director Tim Purdon says: “What these companies do is encourage vexatious claims. It would be good to have a set of procedures that we can follow when we receive complaints from CMCs. Then again, if the regulators were acting more promptly, there would not be the need for these CMCs in the first place.”