From Bill Thomson
An open letter to Paymentshield introducersWhen you signed your agency agreement with Paymentshield, did you happen to read the terms and conditions you were presented with?
If you didn’t and you are expecting to sail serenely into a retirement buoyed by the renewal commissions you have worked so hard to build up over the years, think again because Paymentshield has other ideas.
Tucked away in clause 17, you will find a sub-section that states that Paymentshield will terminate your agreement with it if you ‘lose’ your FSA status.
Now you may think that this will only apply if you are drummed out of the Brownies because you have incurred the regulator’s wrath.
You may think that but it is not how Paymentshield sees it.
It interprets the word ‘lose’ as including ‘giving up’. Therefore if you decide that now you have retired or merely given up writing regulated business you don’t need to bother with the hassle and expense of maintaining your FSA registration, Paymentshield will terminate your agreement.
Sure, you could transfer the re-newals to another FSA-registered firm – provided you get a letter of authority from all of your clients confirming they agree to your doing so.
And just in case you actually can be bothered doing all this, Paymentshield includes a catch-all clause.
This says that the company can terminate your agency and stop paying your renewals if it is ‘commercially acceptable’ to it to do so.
I have to tell you Paymentshield found it commercially acceptable to cease paying renewal commissions to hundreds of agents in this situation who now see years of their efforts to build up their Paymentshield commissions going straight into the company’s coffers.
Of course, not all of it is going straight into the company’s bank account. A cool £10m is going into Stuart Pender’s pocket, he being the managing director of the company that is responsible for this decision, and the man who is about to pocket this amount on the sale of Paymentshield to Towergate.
There is one way to hit Mr Pender in his pocket and perhaps force him to think again.
Some £3.7 million of this payment is to be paid in the future. Presumably it is based on future performance.
If you are concerned at the company adopting such immoral practices and worried that you might find yourself facing this situation – as you inevitably will – you could decide to find another general insurance supplier. This might be one that honours the commitments it makes. If I had a pound for every time I attended a Paymentshield roadshow to hear the company talk about the value of the renewals I was building up I wouldn’t need the renewals in the first place.
Believe me, if you do nothing, you won’t be sailing into a champagne lifestyle retirement, more like crashing in to a beer and skittles nightmare.
Thomsons Mortgage Services