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firstdebtrecovery - Genuine or scam ?
Comments
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Firms cannot cold call for business that will be passed to a solicitor. Fact. If you don't like hearing it from me then take it up with the Ministry of Justice and the Solicitors Regulation Authority. I didn't write the rules.
Yes - I suspect that there are a good number of CMC's who don't know how to run their businesses. That may explain why so many are having their authorisations revoked by the MoJ.
You will also find that the vast majority of CMC's that tout for business on unenforceable agreements are not licenced by the OFT, even though the OFT has made if quite clear that a CCL is required. This will catch up with them in due course - the OFT is very keen to hear about businesses trading without authorisation.
My concern is for vunerable people to be conned into parting with their cash in the false hope of getting out of debt, even with the promise of a refund if unsuccessful, and finding that the firm then gets closed down as the industry regulator and the OFT catches up with them. No firm = no refund.0 -
Firms cannot cold call for business that will be passed to a solicitor. Fact. If you don't like hearing it from me then take it up with the Ministry of Justice and the Solicitors Regulation Authority. I didn't write the rules.
Yes - I suspect that there are a good number of CMC's who don't know how to run their businesses. That may explain why so many are having their authorasations revoked by the MoJ.
You will also find that the vast majority of CMC's that tout for business on unenforceable agreements are not licenced by the OFT, even though the OFT has made if quite clear that a CCL is required. This will catch up with them in due course - the OFT is very keen to hear about businesses trading without authorisation.
My concern is for vunerable people to be conned into parting with their cash in the false hope of getting out of debt, even with the promise of a refund if unsuccessful, and finding that the firm then gets closed down as the industry regulator and the OFT catches up with them. No firm = no refund.
And where are you getting this information from that these firms are con artists? How many ppl have you come into contact with that have had their money stolen from them without a case being pursued?
Do you not think that the OFT would asak for the licence money before being closed down? Does the MOJ inform the CMC's that they need other licences in order to operate?
ALL CMC pass work to a solicitor - but they are not passing anyone at the point of contact, they are asking people to become clients with themselves. If that client then chooses to accept a solicitor to then do some work for them, that is a new transaction of referring existing clients, if the client so wishes.0 -
AverageJoe wrote: »And where are you getting this information from that these firms are con artists? How many ppl have you come into contact with that have had their money stolen from them without a case being pursued?
Do you not think that the OFT would asak for the licence money before being closed down? Does the MOJ inform the CMC's that they need other licences in order to operate?
ALL CMC pass work to a solicitor - but they are not passing anyone at the point of contact, they are asking people to become clients with themselves. If that client then chooses to accept a solicitor to then do some work for them, that is a new transaction of referring existing clients, if the client so wishes.
Welcoming the new guidance, Ray Watson, Office of Fair Trading (OFT) Director of Consumer Credit, said:
'The OFT will not hesitate to take enforcement action against licensed claims management businesses who engage in unfair business practices by deliberately misleading vulnerable consumers about the services they offer. Businesses should also be aware that if they offer debt counselling or debt adjusting services without holding an appropriate licence, they will be committing a criminal offence and risk prosecution, and that any agreements they enter into with consumers whilst unlicensed may be unenforceable.'
Let me make it quite clear. I am not saying that all CMC's are 'con artists'. However you cannot deny that the indsutry has not got the best of reputations. The MoJ authorisation regime is itself the product of the concern surrounding the industry - anyone remember The Accident Group?
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Welcoming the new guidance, Ray Watson, Office of Fair Trading (OFT) Director of Consumer Credit, said:
'The OFT will not hesitate to take enforcement action against licensed claims management businesses who engage in unfair business practices by deliberately misleading vulnerable consumers about the services they offer. Businesses should also be aware that if they offer debt counselling or debt adjusting services without holding an appropriate licence, they will be committing a criminal offence and risk prosecution, and that any agreements they enter into with consumers whilst unlicensed may be unenforceable.'
Let me make it quite clear. I am not saying that all CMC's are 'con artists'. However you cannot deny that the indsutry has not got the best of reputations. The MoJ authorisation regime is itself the product of the concern surrounding the industry - anyone remember The Accident Group?
Misleading offers from CMC as the text you provided says - is all about false advertising and making ppl think that they have a "case" b4 doing any investigative work. It goes on to say about the criminal offence relating to Debt Management services - ie IVA advice DMP advice etc...
CMC are not debt advisory services, they are claims management.
I see not breach there, the OP did not mention debt advisory issues.
AJ0 -
Do I really have to spell this out?
The OFT has made it clear that it regards businesses that negotiates with creditors on behalf of clients as 'debt advisory services'. That includes the activity of claiming that agreements are unenforceable and seeking a reduced settlement or write off.
OFT guidance
1.[FONT="] [/FONT]The Consumer Credit Act 1974 (the Act) requires companies who offer debt counselling/adjusting services to consumers to be licensed by the OFT. Businesses who are authorised by the MoJ to provide Claims Management Services will also need to be licensed under the Act if they engage in any debt counselling/adjusting activities, including the following:
·[FONT="] [/FONT]advising on how to restructure debts, how to alter debt repayments or how to achieve early resettlement of debts
·[FONT="] [/FONT]contacting creditors and/or negotiating with creditors, on behalf of the debtor, in order to make any of the above arrangements (whether that contact amounts to 'negotiation' or not)
·[FONT="] [/FONT]providing a facility for the debtor to make a single repayment which is then distributed on his behalf to his creditors
2.[FONT="] [/FONT]Following implementation of the new licensing provisions by the Consumer Credit Act 2006 on 6 April 2008, a business applying for debt related licence categories will need to submit a Credit Competence Plan (CCP) as part of its application and should expect to be subjected to an on-site visit as part of the assessment of its competence to engage in this activity as the OFT considers such credit activity to be high risk.
3.[FONT="] [/FONT]From April 2008, licensed businesses can have specific requirements imposed on them if the OFT is dissatisfied with any matter in connection with the business. If such a requirement was not complied with, the business concerned could be subject to a financial penalty of up to £50,000. The OFT can also refuse or revoke a licence if it decides that a trader is not fit to hold one.0 -
I'll come back to this later, if necessary. It is, after all, a sunny afternoon
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The problem is you unwillingness to look at the rules and companies that it affects. Firstly, what is a referal?
1 - phone call from XXX CMC saying "hello, blah blah, we can refer this case to our local solicitors...etc" AGREED - NO GOOD HERE..!
2 - phone call from XYZ CMC saying "hello, blah blah, we can take a look at your case and our legal panel can audit your agreements" - this is not a referal.
By the same token all of these regulation apply to LTD companies only, if you are a sole trader or partnership, it does not apply. Something you have overlooked.
Also, the CMC do not in anyway advise or negotiate on behalf the client, the regulated legal team do who the CMC have an arrangement/partnership with - the client remains a client of the CMC througout and is not passed off to any other body - other bodies may join in with the work, but this is not considered as being "refered" as the client remains the client of the CMC.
Interpretation is 9/10th of the law - understand how to fit your business into most the rules, then fit the rest of the rules into your business - hence why not that many firms have been blanket closed but they "all" seem to be breaking the law as you put it. The theory is great, it just isnt there in reality as all of your arguement in theoretical.
AJ0 -
This started off as if AverageJoe was an innocent customer having made a successful claim in the past....
It now sounds like AverageJoe is a lot more involved with one of these claims companies than he is letting on!!!
Just my opinion.0 -
AverageJoe wrote: »The problem is you unwillingness to look at the rules and companies that it affects.
Do you not think that you have a bit of an unwillingness to accept the black and white facts as published by the industry's governing bodies?AverageJoe wrote: »Firstly, what is a referal?
1 - phone call from XXX CMC saying "hello, blah blah, we can refer this case to our local solicitors...etc" AGREED - NO GOOD HERE..!
2 - phone call from XYZ CMC saying "hello, blah blah, we can take a look at your case and our legal panel can audit your agreements" - this is not a referal.
The OP clearly stated that the cold caller said they would refer the business to a solicitor.AverageJoe wrote: »By the same token all of these regulation apply to LTD companies only, if you are a sole trader or partnership, it does not apply. Something you have overlooked.
Where on earth are you getting this from? Please click on this link and read the second paragraph from the bottom of page 4.AverageJoe wrote: »Also, the CMC do not in anyway advise or negotiate on behalf the client, the regulated legal team do who the CMC have an arrangement/partnership with - the client remains a client of the CMC througout and is not passed off to any other body - other bodies may join in with the work, but this is not considered as being "refered" as the client remains the client of the CMC.
Interpretation is 9/10th of the law - understand how to fit your business into most the rules, then fit the rest of the rules into your business - hence why not that many firms have been blanket closed but they "all" seem to be breaking the law as you put it. The theory is great, it just isnt there in reality as all of your arguement in theoretical.
Ask yourself why the OFT would talk about the need for businesses to hold a CCL as part of a warning to consumers about being mislead by the claims industry about the enforceability of credit agreements?
My 'interpretation' is not only based on theory - I have also personally checked it with the OFT, and they agree. What are your interpretations based upon?
I have no problem with the existence of such firms, but if they are in the business of pointing out to other companies their failures to abide by their regulations and laws, then is it not reasonable that they abide by their own, and be held equally to account if they don't?0 -
Originally Posted by AverageJoe
By the same token all of these regulation apply to LTD companies only, if you are a sole trader or partnership, it does not apply. Something you have overlooked.
Where on earth are you getting this from? Please click on this link and read the second paragraph from the bottom of page 4.
Yes correct - but this paragrah is referring to MOJ licence and does not mention any other lieceing body or it would need to specify - the MOJ are not assuming ppl are mind readers...
I was talking about your comment on other regulatory bodies licencing CMC firms - only LTD CMC firms would need all licening coverage.
Agreed with the you on the OP saying that he wouls be referred tho - if that was what was stated and not the OP's personal understanding of it.
Basically, if you're a ST or Partnership and you operate as a CMC that does not refer clients but deals with them by using a partnered regulated law firm that works with the CMC upon request of cases - then the only licence you need is the MOJ. They can cold call on the phone as there is no actual referal (not talking about OP here).
If you are a LTD firm, then you'll need more licencing etc..
My point with this is not to try and prove you wrong, you are very well informed - but to say that the law is open to interpretation most of the time and so long as you (CMC FIRM) can show a justifed reasoning of oerations under reasonable interpretation, then there wont be an issue.
And there has not been many issues to date.
AJ0
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