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Nic Cicutti: Talk is cheap when battling the claims firms

A few weeks ago, I wrote an article about the excellent response to a claims chasing firm by Steve Foreman, an IFA at of GraingerCo Financial Services in Tunbridge Wells.

Steve, as many of you may remember, became fed up with a claim firm to carrying out a fishing expedition with respect to a PPI policy he had not even sold. He decided to invoice the company for wasting his time and threatened legal action if it did not pay up. The firm caved in and sent him a cheque for £120.

I praised Steve and contrasted his actions to the pointless whingeing on the part of so many other financial advisers about issues over which they have no realistic chance of influencing, such as whether former FSA boss Hector Sants should receive a knighthood.

In addition, I made a pointed reference to the failure of “IFA trade bodies” to launch a concerted campaign aimed at stopping these ambulance-chasers in their tracks.

No sooner did my article appear than a pained online response from Apfa council member Neil Liversidge appeared below it, defending both his trade body and fellow-council member Alan Lakey, a prolific writer on the subject of claims firms, from accusations of inaction.

Neil wrote: “I have obtained a meeting on 24 January with the MoJ about this very issue and come February I shall be sueing a claim fabricator myself, for a contrived complaint that went nowhere but ruined my holiday last August.

“I get the impression that you sit there with a towel over your head penning vitriol rather than bothering to find out what we are actually doing.”

Despite his aggrieved tone, Neil somehow forgot to mention that Apfa – and its previous incarnation Aifa – failed to do anything significant on this issue in the 18 months or longer that Money Marketing has been covering the topic. Or if it has, it has successfully hid the fact from its members, certainly as far as the trade press is concerned.

In case I was mistaken, just before writing this column I spent hours trying to find out what, if anything, Aifa/Apfa had been doing on the subject. My many searches were not just on Money Marketing’s own website but also the wider internet. They included “Aifa + MoJ”, “Aifa + claims management”, “Aifa + claims”, “Aifa + PPI”.

Bear in mind that in the past few months alone, Money Marketing has covered the PPI issue more than 100 times, guess how many times Aifa/Apfa has spoken out on this matter?

The short answer is that are only a handful of comments by either version of the trade body. One was a response by former Aifa policy director Chris Hannant, who replied in October to the Ministry of Justice’s consultation paper on the issue two months earlier.

Hannant’s proposal was that “in the interests of consumer protection, we must ensure sufficient resources and expertise is applied… This means transferring regulation of CMCs to the new regulator, the Financial Conduct Authority.”

In December last year, after Steve Foreman’s letter to Money Marketing, Hannant, now at Apfa, was quoted as saying: “Advisers are perfectly entitled to seek damages for their loss of time and good luck to those that do.

“It is an issue for any individual firm or adviser to consider and do what they think is best. Each firm has to deal with things as suits their circumstances – it would not be for everyone as it takes a fair bit of time out of the day.”

Now, call me naïve, but that doesn’t strike me like a trade body champing at the bit to mount an all-out battle against claims chasing firms. Nor, somehow, do I see any of them quaking in their boots at the (non)prospect of Apfa squaring up to their disgraceful tactics.

Meanwhile, Neil Liversidge, who could be co-ordinating a concerted IFA campaign against the ambulance chasers, confines himself to grandiose – but utterly ineffective – antics, such as writing open letters to David Cameron on the issue, as he did last September.

I can just see Cameron interrupting all his other pressing matters of state to devote time to read Neil’s letter and act on it. Not.

Last week, Neil took his “campaign” one painful millimetre further forward, whereby an “exchange of letters” last year culminated in his planned meeting with MoJ officials. This follows his playing along to an Indian call centre operator called Jack, as reported in MM.

Neil must know his meeting with the MoJ is not the first. Last year, both Alan Lakey and Panacea Adviser chief executive Derek Bradley also met officials there and made the same points I suspect he will have made the other week.

Somehow, I can’t help feeling that the MoJ knows exactly what is happening out there. They know con merchants are rife, yet its willingness to police them is on a par with both the ABI and IBRC, who failed to stop PPI misselling in the first place.

So the question is not whether Neil has more fruitless meetings with the MoJ, but what his trade body actually does in practice to stop ambulance chasers in their tracks. On current evidence, my guess is very little.

Nic Cicutti can be contacted at nic@inspiredmoney.co.uk

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Comments

There are 14 comments at the moment, we would love to hear your opinion too.

  1. Nic makes a number or salient points – almost hurts me to say it.

    The sloth of AIFA and the lethargy of most individual advisers has allowed the inflation of this very British version of ‘money with menaces’.

    When Derek Bradley and I met with the MOJ it was to explain to them what wa happening (we couldn’t believe that they understood the scale of the fraud), to explain to them how CMC fraudsters use the FOS processes to blackmail firms and also ask them what the hell they proposed doing about it.

    We received a committment from the MOJ that they would gladly receive instances of fraud and would take the appropriate action.

    Since then I have sent them numerous instances that other firms have sent to me and I have also advised other firms on how to do this themselves.

    I know of two instances where enforcement has been undertaken.

    PAFA will not let the matter drift any further. Both Neil and I will make sure of this.

  2. RegulatorSaurusRex 7th February 2013 at 9:48 am

    How can advisers afford to waste all this time on such trivia?

  3. Nic does make a good point that trade bodies are strangely silent about supporting their members when faced with such blatant harassment and attempted fraud.

    They could also do more to challenge FOS and its position outside of the law and particularly where they fabricate reasons for cases to fall under their jurisdiction and then fabricate reasons for upholding cases.

  4. Nic the man of the sweeping statement. I would to know how you actually know what individual IFA’s have done to refute the goings on of these claim chasing firms. I have personally spoken to the FOS about fraudulent claims in the past and have written to the MOJ at least twice about these firms trying it on with their trawling tactics. What they did afterwards is anyone’s guess but again Nic you just can’t help yourself having a little dig at anyone making a point on this forum. “Pointless whingeing” is it?, where anyone with the temerity to have a view about current affairs and maybe about a FSA failure being rewarded by the honours system. In case you missed it Nic an article was published about Sant’s Knighthood and how this works Nic; readers are invited to express their views and comments. You actually have some positive points at times but to be honest they get lost in translation because you’re a very annoying writer who obviously has something against IFA’s. Did you fail your exams or something?

  5. Nic appears to have hit a nerve (one of many over the years) but one of the reasons I did not join the AIFA as it once was is that they had no influence in sufficient quantity to change anything.

    What every IFA should do who receives one of these unsubstantiated claims is issue a county court summons for defamation agains the claimant personally and the CMC because a false claim once put into writing is libel and you can claim damages to your personal and professional reputation.

    Usually a letter of claim and intent has to be sent first and I found out some years ago that when a false claim of this nature was made against me by (would you believe it) a compliance assistant I used to work with previously that the mere threat of sueing for damages for libel and defamation focuses their minds on the very real possibility that if they pursue a false and fraudulent claim they are going to be hit with a substantial bill.

    I set the initial damages claim at £25K and it worked, the claimant backed off and withdrew the complaint once she had received the letter. It was also rejected by the firms compliance dept.

    If someone wants to trash your reputation then put them on the defensive. No other way really or we will all suffer.

    Proof of libel is easy to provide as this is the documents sent by the CMC on behalf of their claimant, especially if your records are exemplary like mine were at that time.

    Record keeping is the key to defending spurious claims.

  6. Spot on Nic…..for a change. CMC’s rely on our inaction to get away with their continuing fraud and what do we do? Mostly we stand back and do nothing, oh except for moan about it from the sidelines. I applaud Alan for trying to reason with the MoJ, but to be fair nothing will happen in the near future to change their practices.
    By the time we actually get some changes CMC’s will have moved onto another scandal or evolved to ply their filthy trade in another industry.

  7. Yesterday evening I received an unsolicited call on my home phone, registered with the Terlephone Preference Service,from a Scouse accented woman who said she worked for ‘UK Marketing’ and was calling about my accident. I asked her to tell me more about her firm and she told me she wanted to talk about my accident.
    When I stated that she was breaking at least three rules, firstly the MOJ rule about unsolicitored marketing calls, secondly about inappropriate marketing methods banned under the telemarketing trade association and thirdly the TPS rules she said something that struck me dumb for a monent. She stated ‘Thats OK sir, you can now sue the TPS for not stopping me from making this call.’
    How any blame can be shifted from the company that failed to observe the TPS rules to the TPS themselves for being ineffective is beyond me. Anyway, I stated my case that my name and number must be permanantly taken off her firms lists and any further contact will result of an invoice for £150 sent to her employers. However before I could finish my statement, she had disconnected. UK Marketing Survey Services Limited with an address in Liverpool has a director by the name of Lee Spencer, who is also a director of property development, car hire, car maintenance and a utilities discount club businesses

  8. Neil F Liversidge 7th February 2013 at 12:08 pm

    Nic, it is absolutely true that my campaign ‘inches forward’. I do what I can within the constraints of being a totally unpaid campaigner who has a business and a family to attend to. The trust is though that rarely a week goes by when I am not trying to push this forward in one way or another and that will include sueing a claim firm once the six-month FOS window closes on the case in question. I would have done it already but my PI insurers insist that I wait out the period. If anyone wants to take shots at me, feel free. It’s water off a duck’s back. I pay my APFA subs and I advance the campaign against claim fabricators in every way I know how in all the time I can afford. This week i wrote to the MoJ people I met with last week, plus the justice minister and my own MP. If anyone thinks that’s not enough, feel free to tell me what YOU are doing.

  9. Nic, maybe it’s just me but if you wanted this information why didn’t you take the radical option and pick up the phone to APFA and ask them for it???

  10. @ Neil Liversidge: look Neil, no-one doubts YOUR commitment. But the fact is it’s not YOU the members should be demanding action from. They should be asking why it is that Apfa itself, the body on whose council you (and now Alan) sit, is doing sweet FA about the issue. Which is also why it’s wrong to blame fee-paying Apfa members for not doing enough themselves: they are paying their subs PRECISELY so that that someone will look after their interests.

    Ages ago, I said that there was a danger you would be turned into a fig leaf for the trade body, here to hide the reality of its ineffectiveness and unwllingness to do anything to defend their interests. You bridled at the very suggestion. Yet the more I watch you banging your head against a brick wall, the more I think I was 100% right.

    @ Grey Area: If I’d picked up the phone to Apfa, what do you think they would have told me that my own research didn’t find out – apart from more platitudes from Chris Hannant about the pernicious nature of claims chasers?

    At the end of the day, I approached the subject as if I were a member. I looked to see what Apfa was saying publicly it would do about a subject of importance to its members. And the answer came back: not a lot.

  11. Neil F Liversidge 9th February 2013 at 8:33 pm

    Nic, the problem is that there just aren’t enough fee-paying APFA Members. The reality is that APFA runs on a shoe string. I am not criticising those who pay their fees and support APFA’s efforts. What I find more than a bit rich though ais that those who are not members, who contribute zero, blog against APFA at every opportunity. and accuse it of lack of action. APFA membership per person costs less than a set of tyres for the average IFA’s car , but the fact is that all too many won’t put their hands in their pockets, yet still expect effective representation. I guess it’s no wonder really that claim chancers want somehing for nothing; their mindest is little different from all too many of APFA’s detractors. It’s a phenomenon I’ve experienced before. As a 32-year Member of the Motorcycle Action Group – MAG – I’ve come across no end of bikers who pontificate about what MAG should be doing but who, just like so many advisers, will never put their hands in their pockets to pay for Membership. At the end of the day, biker, financial adviser or general public Joe Soap elector, we all get the representation we deserve.

  12. When Neil’s piece first appeared I posted this:
    Getting a call from one of these shysters in no big deal – I just tell them to P— off and put the phone down. Life is too short to waste time.
    Fortunately I have not yet had one of these firms approach me on behalf of a client. Naturally I guess it may happen one day, but when it does, what is to stop me contacting the client directly and asking them why they believe they have a case to complain and suggesting that they put the case to me directly. I would point out that even if their case was genuine, why go to a CMC and loose a hefty slice of what they may receive, when they could do it themselves and not have any deductions.
    Apart from doing that I wonder how I would be placed if I then entirely ignored the CMC after sending them a copy of the letter I had sent the client (as above) and stating that if I couldn’t satisfy the client they were at liberty to go to the FOS. If I am innocent then presumably I have nothing to fear. If I’m guilty it would be wise to settle directly with the client before things went any further.
    Of course this presumes that I am not getting dozens of complaints as I believe the fee free limit at the FOS is now quite generous (if you are a small firm).

    How out of touch am I?? Can someone set me right on this?

  13. Neil: As you say, the fee is small indeed, and presumably is tax deductible. But your comments of frustration sound like it’s turned into a chicken and egg situation.

    Turn it the other way round: if Apfa doesn’t justify the membership fee, less people will join. A smart, well-aimed campaign, with a quick-and-dirty website and some good effective PR would cost buttons – yet it would almost certainly bring in scores of new members. Yet there appears to be a paralysis at Apfa Towers, an unwillingness to roll up sleeves and get hands dirty. No wonder IFAs no longer see it as relevant.

    And before anyone from Afpa gets up on their hind legs to say this issue is not important, well maybe it isn’t as vital as, say representing advisers’ interests in Europe. But it’s always a question of perception, isn’t it? People rightly or wrongly vote with their money. They don’t seem to get this in Throgmorton Street.

  14. Hi Harry, my understanding is it’s currently three free cases, I think it goes up to 25 from April.

    The main problem with simply not dealing with the complaint is that it would be a breach of the DISP rules, which requires a decision to be issued on a complaint, whether it is justified or not. However stupid it may be, the customer can chose to be represented in their complaint by whomever they choose. However, it would not take much tweaking for the letter you propose to meet the requirements of a resolution letter.

    From a practical perspective, there is generally no point telling the customer to approach you without the input of the CMC, because by then they are tied into contract with the CMC(and may be charged by the CMC if they try and withdraw the complaint).

    Obviously, if the CMC complains about a product that you didn’t sell (or perhaps didn’t even exist), it is wise to point this out in the decision letter. That way, if it does go to FOS you can argue ‘Frivolous and Vexatious’, and if FOS agree, the complaint will not count towards your free case tally.

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