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Rogue claims firms ignoring the regulator, says BSA

Rogue claims firms are ignoring warnings from their regulator the Ministry of Justice, the Building Societies Association claims.

The BSA says it has no confidence that errant firms will heed warnings from their regulator and calls for it to be given more powers to intervene.

BSA research shows bogus payment protection insurance claims rocketing 247% at building societies in the six months to April 2012, compared to the same period previously.

A whopping 57% of claims management firm claims were non-sale claims while it found an increase in pressure selling tactics targeted at elder;y and vulnerable customers.

Specifically the BSA wants the Ministry of Justice to be able to fine and strike off rogue firms and calls for a independent ombudsman to monitor complaints for the sector.

Adrian Coles, director-general of the BSA, says firms have clearly ignored warnings from the Ministry of Justice.

He says: “It is clear that the Ministry of Justice simply does not have the powers that it needs to effectively control the rogue elements in this industry. They do not even have the power to fine.

“Looked at from the perspective of our highly regulated sector some claims management companies look remarkably like the modern day equivalent of highwaymen.”

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  • Chris Gardner 13th July 2012 at 12:37 pm

    Matthew Whiting | 13 Jul 2012 10:49 am

    @ Chris does that mean that banks that told clients they MUST have PPI also committed perjury?

    No Matthew it does not. The law has dealt with that issue already has it not? court ruling re PPI etc etc.

    Fabricating a claim however shoudl be treated as attempted fraud, and if it gets as far as the court, then perjury.

    If a consumer has been mis-sold to then there is a framework for remedy.

    Maybe one day Matthew in your personal life somebody may chose to make a false allegation about you – complete lies etc etc. By the time you prove your innocence you may find your reputation destroyed. I hope not, but you get my point.

  • Matthew Whiting 13th July 2012 at 10:49 am

    @ Chris does that mean that banks that told clients they MUST have PPI also committed perjury?

    Not quoted in this article, but in a different article the BSA are quoted as saying that CMC’s partake in high pressure selling and don’t tell clients how much they will charge. Hmmm, so not one bank adviser used any high pressure tactics to sell PPI and due to the regulations covering the sale of PPI if even the client directly asks ‘how much commission are you earning from this?’ the bank/adviser doesn’t have to tell them! The term ‘pots and kettles’ comes to mind.
    Unfortunately some building societies will get incorrect complaints, but that isn’t the fault of the client or the CMC, it’s the fault of the people that mis-sold so many of these policies – ah yes the banks!

  • Chris Gardner 13th July 2012 at 9:23 am

    mmmm. Me thinks there are comments here from vested interest CMCs. Frivolous and vexatious claims should be treated as perjury.

  • Simon Mouncher 10th July 2012 at 10:16 pm

    Peter Turner : What a load of tosh. Remember a customers complaint is treated the same way if they use a CMC or not. FACT banks do not ask clients to complete the FOS questionnaire in all cases when they complain directly. Q: Why do the banks have a target for upholding complaints that changes on a monthly basis. A : Because they are still shafting clients on a daily basis. If the banks did as Alan says and refunded all the money then the problem goes away. Whilst they defend claims sent in both directly and from CMC’s there is a chance they won’t have to give the money back. It is simply a numbers game for the banks

  • alan parker 9th July 2012 at 10:51 pm

    If banks and building societies wanted to put CMCs out of business and stop this over night, they should write to all customers sold PPI and advise they might have a claim. As is an accepted way to make reparations for any suspected systemic mis-selling following root case analysis. This is required both under DISP, reconfirmed in PS10/12 and further in the Judicial Review. To be fair, the banks have been promising to do this since the JR (May2011) but have for some reason or other have not managed to get round to it. Methink they doth protest too much.

  • Peter Turner 9th July 2012 at 8:44 pm

    Both anonymouses – that does not excuse the ambulance chasers from failing to even submit the FOS questionnaire.

    Despite being told by the MOJ that they must always send it with a complaint, I have yet to see it happen.

  • Simon Mouncher 9th July 2012 at 12:12 pm

    Whilst not directly linked to the article I do believe anonymous 9.42 has a very good point.

    Part of the mis selling was not explaining the insurance to the customer so in many cases they dont know if they had it.

    Certain lenders are refusing to supply information under the data protection act, tus encouraging claims firms to send letters of complaint.

    Lloyds who are the biggest offender seem to change their policy weekly. It is also interesting that when you ring them from a claims management company you go through to an indian call centre and can only speak about one case. You then have to re dial and go through the hold process for another 20 minutes. Not sure how this is helping the customer

    The facts are simple claims management firms are needed but like every industry there are good ones and bad ones

  • Richard Rouse 9th July 2012 at 11:20 am

    To Anonymous at 9.42am – did you even bother to read the article? The majority of claims being submitted by CMCs are for customers who hadn’t even bought PPI in the first place.

    I think the criticism of CMCs is well-placed.

  • John Toogood 9th July 2012 at 9:42 am

    There seems to be an awful lot of criticism of the claims sector by the companies who are responsible for £m’s of missold protection. I dont see any effort by these companies to voluntarily refund money to customers who they already know were missold this insurance. Adrian Coles needs to advise his members to automatically refund these missold £m’s without waiting for these “Robin Hood” companies to come to the aid of their customers.