Mortgage Strategy kicks off its Make Claims Firms Pay campaign this week. The objective is simple we want the government to include a clause in the Financial Services Bill whereby claims firms are made to pay a £500 fee to the Financial Ombudsman Service for every claim against a broker that is deemed to be without merit.
In a further attempt to motivate the government we have set up an e-petition. It’s not live yet but when it is we will email it to all readers so it gains maximum support.
We’re not anti the basic idea of consumers making a claim for a payment protection insurance policy that was mis-sold far from it. For many lenders this product was a cash cow that they had no qualms burdening their customers with.
But with the claims tsunami that’s gripping the country at the moment many brokers are being hit with claims for PPI products which in many cases they never offered.
After the first three complaints to FOS, brokers have to cough up £500 per complaint. If it were made law under the Financial Services and Markets Act that the firm that sent the bogus complaint to FOS had to pay the £500, rather than the broker, it would stop this flagrant opportunism.
The Association of British Insurers recently called for an end to the ambulance-chasing compensation culture for personal injury claims. It wants to stop people making exaggerated or false injury claims because of the no-win no-fee legal system on the off chance they will win a settlement. This situation is similar to claims firms targeting consumers over spurious PPI claims.
For the brokers affected by this problem there is the real threat of death by a thousand cuts.