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Letter of the week: Time to take a firm stance on claims firms

I wanted to say ‘well done’ to Steve Foreman – ‘Dreaded PPI claim that ended with a cheque for me’ (letters 29/11/12).

With RDR ahead and firms adopting a ‘client agreed’ charging approach, we can not accommodate spurious complaints nor serious provider mistakes.

In the last few months we have issued invoices to two providers who have made serious mistakes which have resulted in us spending hours resolving the resulting issues – both (quite rightly) asked us to quantify what had happened and thereafter found in our favour and made a financial settlement in compensation. Whilst not fully meeting our time cost, it at least went some way to do so.

With regard to complaints, the limited number of complaints we receive are ALL via one particular claims management company – the latest complaint has been found to be without foundation and we are considering taking the sort of steps Steve did. The facts presented to us were incorrect and I therefore take the view either the CMC is undertaking no due diligence or this is potentially an attempt to defraud our business.

It’s also worth noting that the CMC in question ‘cold called’ me at home on a telephone preference service listed phone line telling me I was entitled to compensation (stating they had records confirming this). When challenged on this (I’ve never had PPI) their confidence significantly reduced and I made them aware I thought their approach was borderline fraud.

I also received a telephone call from a client who had also spoken to the said CMC – he was being encouraged by the CMC to make a complaint because ‘he had nothing to loose’ – what’s more the endowments he was being told to complain about matured with a surplus. Thankfully the complaint never materialised however these points demonstrate the approach CMCs are taking – clients indeed have nothing to loose, but IFAs who have to spend time investigating complaints which are essentially without justification do…..

I therefore intend to consider how we as a firm can hold the CMC to account and I feel that this recent complaint is the start of a more firm stance we will try and to take on such matters.

Paul Stocks
Dobson & Hodge Ltd

Doncaster

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Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. It might help if the MoJ were to wake up to the fact that most of these scumbag cowboy outfits are engaged in systematic attempted fraud and crack down on it. Okay, so it’s banned a few of the very worst offenders, but a wealth of evidence points to the fact that it’s made precious little difference. Its own rules state:-

    “Cold calling in person is prohibited. Any other cold calling (by telephone, email, fax or text) shall be in accordance with the Direct Marketing Association’s Direct Marketing Code of Practice.’

    And

    Authorised businesses should note that whilst Rule 4 prohibits cold calling in person only, cold calling by telephone is prohibited by Rule 8 where the client will be referred to a solicitor.”

    Yet cold (telephone) calling, texting and e-mailing remain rampant. Like thousands of other people, I receive several cold phone calls and texts every week, about which the MoJ appears to be doing nothing or, if it is trying to do something, its efforts are obviously entirely ineffectual. What a waste of time and money these people are. The CMC’s are laughing at them and carrying on regardless.

  2. The question is why the SFO isnt involved – there is clearly attempted fraud going on encouraged by corporate entities.

  3. Some of the claims management firms send out the same letter for each client and even if it’s not payment protection that the clients have (usually it’s not), when you respond they then send their letter to the fos.

    At least 80% of our complaints from them have not been ppi.

  4. Yes the annoying opportunists are very busy, unfortunately they must be finding victims and obtaining compensation in order to keep their operations going.

    However, many currently authorised IFA firms are authorised by the MOJ for managing claims related to financial products. One in particular has been purchasing physical and electronic files of failed firms from the administrators and systematically going through them to find evidence of unsuitable advice, they have found a very high proportion of poor practice. The burden will fall on the FSCS who will send the bill to you.

    I would like to ask the advisers reading this if they know of consumers who have lost money through misselling and whether they have done anything about it instead of complaining about cold calling, the fewer claims there are the fewer CMCs there will be in future. Go on, cut off their supply lines.

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