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Mortgage Strategy e-petition to lobby for claims firms to pay out

Mortgage Strategy is calling for claims firms to be made to pay for unsubstantiated claims against brokers by launching a government e-petition.

After hearing from scores of brokers who are wasting time and money dealing with spurious claims related to payment protection insurance, Mortgage Strategy is urging brokers to sign its e-petition and lobby their local MPs.

Our Make Claims Firms Pay petition says firms should be forced to pay a £500 fee to the Financial Ombudsman Service for every claim of mis-selling against a broker or financial adviser that is deemed to be without merit.

The e-petition will close in six months and if it gains 100,000 signatures will be considered by the government for debate in the House of Commons.

Robert Sinclair, director of the Association of Mortgage Intermediaries, says the campaign will help to raise awareness of the problem brokers face regarding claims firms.

He says: “We would expect professional claims firms to only take on cases that have a good chance of success and believe they should make a contribution to FOS costs.”

Sinclair says a change in the law under the Financial Services and Markets Act would be required if claims firms were to pay the FOS fee and this could be achieved by inclusion in the Financial Services Bill, which is in its draft stages.

Brokers pay a £500 fee to FOS for the fourth claim they receive each year and every claim thereafter, although FOS says it will not charge in cases where PPI has not been sold.

The e-petition has been checked by the government and is now live on its site.

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Comments
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  • Robert Kennedy 6th January 2012 at 7:58 pm

    Wow a wopping 486 signatures. Maybe the market place knows deep down that a number of customers did suffer at the hands of advisors.

  • Anonymous 29th September 2011 at 11:03 pm

    What a joke! I think you are missing the point that the problem is not just the miss selling of PPI! But also the fact that it was sold as a single premium which in most case was 10 times over priced, attracted interest which made it ten times more over priced furthermore affected the LTV of a consumer. Not to mention the gastly secret commissions being paid which at worst was 60% of the premium and at best 30%.
    I wonder why we have a financial crisis with single minded views such as above

  • Anonymous 29th September 2011 at 11:02 pm

    What a joke! I think you are missing the point that the problem is not just the miss selling of PPI! But also the fact that it was sold as a single premium which in most case was 10 times over priced, attracted interest which made it ten times more over priced furthermore affected the LTV of a consumer. Not to mention the gastly secret commissions being paid which at worst was 60% of the premium and at best 30%.
    I wonder why we have a financial crisis with single minded views such as above

  • Paul 21st September 2011 at 10:03 am

    I for one am sick and tired of spurious claims and i think the client would think twice if they had something to lose.

    On 3 occasions i have received claims for PPI from FOS or via claim companies and on all 3 occasions i was proven to have sold the product to the client in the correct way. (call recording and a script helps). One client was so annoyed they lost they then tried to complain that they had to wait 3 days longer than expected for their money on a secured loan and cancelled their holiday !!! there was no proof of that either.

    Put simply there are examples of bad representation from brokers but i believe that is heavily weighed against correct advice and the claims culture has found a loop hole. Well done Strategy for attempting to “hit back”.

  • Tom Cleary 20th September 2011 at 5:38 pm

    If the Claims firms or the clients thought they might have to fork out £500 if their claim is found to be spurious, it may make them think twice about making the claim at all! Everyone should sign this petition. There is no reason not too.

  • gerry 20th September 2011 at 11:49 am

    totally agree with calire above. Just one other point.It shows that these supposed”spurious” consumers do not have a clue what their alleged Broker/ IFA sold them. For them not to go back to their Bank/ IFA/ Broker and simply ask them the question or an explanation indicates what your customers think of you.They have to go to third party for “independent “advice.

  • M Wells 20th September 2011 at 11:29 am

    Lorraine, i think you will find that the claims firms are bombarding people with emials, texts, calls and letters TELLING THEM THEY ARE ENTITLED TO A REFUND .. many clients will simply follow the herd. i know people who have not taken ppi but still put in a claim because the claim company told them they should. Also some of these people know they had it and simply see the fast buck. One advert on the radio now suggests in its wording that 20 million policies were sold with a value of 9 billion. They say that the client is due back at an average of 3k (therefore suggesting that all were mis sold) … 96% success rate they claim too! they dont say how they derive at this figure … is it 96% from enquiry or 96% from application or 96% submitted to the lenders or some other figure just to grab attention?

  • Robert Thickett 19th September 2011 at 4:01 pm

    We’ve been waiting for the government to verify and upload the petition and it went live at lunchtime – to sign the petition Anon 2.54pm click on the link here: http://epetitions.direct.gov.uk/petitions/17198

  • Peter Burrows 19th September 2011 at 4:00 pm

    Anon: it does say it will go live after checking!

  • J Tanner 19th September 2011 at 2:54 pm

    A link to the petition page would help! Been trawling through Govt pages for ages and cant find it! Can anyone help?

  • Lorraine 19th September 2011 at 2:36 pm

    One final point…..CMCs use information provided by the client.

    Like solicitors, CMCs act on behalf of the client using information provided by them. So, is it really fair to claim it all on the CMC?

  • Lorraine 19th September 2011 at 2:33 pm

    This is fair enough, if not smelling a bit like a witch hunt. Claims companies in most cases should be able to obtain some form of proof that a PPI policy did exist. There are however some instances where the client cannot locate paperwork, and is adamant they had PPI. In which case, the client will likely be made liable for this £500 fee. However, if the FOS have stated that they will not charge – what is the problem? If this is more to cover the time taken by firms having to investigate claims, then I am sympathetic. However, so many clients had PPI added to their loan/card without their consent, so perhaps the initial enquiry should not be a complaint, but to request copies of records on file to find out if PPI was indeed added. There are simple ways to resolve this problem – I suppose it’s mostly laziness and I’m the first to complain if someone’s laziness costs me time.

    It’s also worth noting that it was mostly the lenders (i.e. call centres) that mis-sold PPI. The majority of brokers did do things by the book and it is a shame that their time is now taken up by superfluous claims.

    I don’t think this petition is the answer. CMCs need to rethink how they treat claims where proof of PPI cannot be provided. This is more of a regulatory issue rather than ‘making people pay’.

  • Jeff 19th September 2011 at 12:00 pm

    The only way to put a lid on this crazy Jeffclaims culture we have is to make the complainant or their representatives financially responsible for spurious claims

  • Mark Piper 19th September 2011 at 11:09 am

    While we are at it lets also have it against clients making the same spurious claims.