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FSA backs Which? campaign against claims firms

The Financial Services Authority is backing the Which? and MoneySavingExpert.com campaign against claims firms.

The consumer organisations have launched a marketing campaign against unscrupulous claims firms that charge consumers a fee without telling them there is a free alternative.

The campaign seeks to address consumer confusion over the fee-charging structures of claims firms after research showed one in four consumers were unaware claims firms charged a fee.

There has been a deluge of claims from these firms in light of the payment protection insurance mis selling scandal.

Speaking to the Chartered Institute of Bankers today Martin Wheatley, managing director of the consumer and markets business unit at the FSA, threw his weight behind the campaign.

He says: “A significant proportion of these complaints have been driven by claims management companies, and I am sure they annoy you as much as they do me.

“There is no need for consumers to use a claims manager where it is free and easy to complain to a firm directly, so I welcome banks getting together with Which? and Money Saving Expert to make the process clearer and simpler for consumers.”

Wheatley pledged to continue talking with the Ministry of Justice, which regulates claims firms, to tell them about poor practices of claims managers.

He says the best solution is for customers to have confidence that the firms that sold payment protection insurance will take their complaints seriously, treat them fairly and make the process easy for them.

He adds: “Throughout this year we expect firms to write to customers who could be due compensation and explain clearly what their options are.  We will then be testing whether banks are providing redress to consumers where they should be. 

“This has been a sorry episode for many of us, but it is important that we all continue to deliver what is fair for consumers and learn from the experience.”

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  • James 5th May 2012 at 3:03 pm

    It’s about time too. Also, would the FSA like to get a hold of those solicitors and legal companies who have set up whole departments to ring round or write to people soliciting claims from the general public? I’m sure they were only doing this because they were public spirited, and of course being able to make money on the back of it never entered their thinking. This has gone on long enough and whilst I do not want to stop people with genuine complaints having the right to pursue their complaints at the FOS it is obvious they have allowed a situation to develop where unscrupulous firms have been aided and abetted by the regulatory bodies as they have never done anything much to stop this growing into the monster it has become.

  • Richard Scott 5th May 2012 at 11:26 am

    I received a request for info from a claim company the other day, for a person who lives 120 miles away, and who had named the company to be claimed against which was different from my own by 1 word in the name. Clearly the company had done a FSA database search and selected the nearest name which was mine. I have rung them and told them I am not the company in question and shredded their cheque. I expressed my displeasure on the phone as they clearly don’t do their homework properly. The company they actually should have sent it to had its FSA permissions cancelled in 2010 for misselling general insurance vis misleading marketing. As others have said companies are fuelling the claim process, by “throwing as much mud to get some to stick”.

  • Roger 4th May 2012 at 5:06 pm

    In response to Dave, these claims companies are often run by mortgage brokers, sadly, which means they know the selling rules. Google the company to see who runs it, and then check the names on the FSA register, and I bet you will find some matches. Tell the company you are forwarding all their letters to the MOJ as you believe the case is spurious or fraudulent and open a dialogue with your customer to determine whether the claim is genuine, and if so how they would like to resolve it. Do not be bullied by these people. Then also report these individuals to the FSA and their networks if they are registered.

  • GRB 4th May 2012 at 3:18 pm

    It is comforting to see that the regulator is ‘throwing his weight behind this campaign’ I am wondering if these chinless wonders have ever considered the fact that if they had managed their own business correctly this mis-selling scandal along with the many others that have have passed them by over the years would not have happened. At what point do these buffoons begin to justify the ridiculous salaries and benefits they receive when to date they seem to have missed practically every major issue in the business’s they are supposed to regulate, personally I would not trust them to run a bath without making a complete horlicks of it. As long as they are sorry though and promise to get better I suppose we can all sleep eaasy at night.

  • dave 4th May 2012 at 3:00 pm

    Its about time these firms were taken to task. I have had a number of claims against me and I have never sold any PPI. I wrote a small number of monthly ASU policies in the past and they are even trying to claim against those. What really annoys me is that they even state that I not allowed to contact me own clients. One question I must ask! If I send a copy of my factfind, Insurance Demands and Needs statement, application etc etc for an ASU policy, what qualifications do these people have to be able to look at the documentation and decide if the client was mis sold or otherwise .