Belfast-based broker David Copeland complained to the MoJ about an English claims firm that he thought had made a frivolous claim against his company.
Despite the firm being regulated by the MoJ and based in England, the MoJ would not address the complaint because the claimants were based in Northern Ireland.
In a letter to Copeland seen by Mortgage Strategy, the MoJ says: “The handling of this particular claim is not regulated under the Compensation Act 2006 as the claimants reside outside of our jurisdiction.”
It says there is no equivalent regulatory body responsible for claims management activity in Scotland or Northern Ireland.
Copeland, a mortgage adviser at An Independent Mortgage Solution, says he finds the MoJ’s decision strange, as he understood if the firm was regulated the MoJ should deal with complaints about it, regardless of where the claimants are based.
He says: “If the firms are able to handle claims on a consumer’s behalf they have to be responsible, they can’t just do what they want. We have never sold a single premium payment protection policy.
“Claims firms are the bane of our lives at the moment, with complaints taking between four hours and two days to deal with. It’s time consuming and I’m sure every other broker would say the same thing.”
He adds: “In theory, these claims firms may be regulated but in principle there seems to be little regulation involved and no checks are being carried out – I have nowhere I can go with a complaint.”
Mortgage Strategy understands there is no regulation of financial claims firms in Northern Ireland or Scotland.
In 2009 the Scottish government ran a consultation into whether the firms should be regulated. An overwhelming 85% of respondents thought regulation was necessary.