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‘Treating customers fairly could provide gift-wrapped claims’

The FSA’s treating customers fairly initiative could prompt the next wave of “gift-wrapped” complaints against IFAs, warns Aifa director general Chris Cummings.

He says claims management groups could exploit TCF’s high-level principles and encourage customers to take complaints over fairness to the Financial Ombudsman Service.

He says the vagueness of the TCF principles, which all regulated firms will have to embed in their business, means that IFAs will find it difficult to reject these complaints and prove their innocence.

Cummings says: “TCF could gift-wrap fairness complaints for these firms and IFAs may struggle to reject them. Once these claims management firms get through endowment complaints, they will be looking for the next opportunity.”

Reynolds Porters Chamberlain senior solicitor Harriet Quiney says: “There is a risk that customers who feel aggrieved will make stress and inconvenience complaints based on TCF. Although the awards will probably be quite small, IFAs will be most vulnerable due to their close relationship with clients and end up paying case fees.”

But FOS spokesman David Cresswell says: “TCF will not alter the nature of our investigations. We hope TCF will lead to fewer complaints because there will be less misunderstandings and less deeply entrenched disputes between consumers and IFAs.”

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