Speaking at the Mortgage Business Expo in London today, FSA director of small firms and contact centre Lesley Titcomb said the regulator as seen annecdotal evidence of an increase in brokers referring clients to claims management firms and of bad practice in this space.
It says in one case it has seen, the intermediary had 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 claims management company approaches your firm, be careful.
“We have seen firms failing to consider their data protection obligations when referring customers without the appropriate consent, others failing to perform any due diligence on the claims manager they refer to, asking no questions about success rates, the average length of time to complete on a claim and refund policies where fees are taken up front. “
Titcomb added: “While we recognise there are good claims managers out there, as with any sector there are poor firms and we expect you to act with integrity and to make the fair treatment of your customers central to what you do.”
In her Expo speech, Titcomb also said it was not the FSA’s intention to exclude self-employed borrowers from the mortgage market and challenged some lender practices in dual pricing between branches and intermediaries, although she said the regulator would not intervene.