Warning: Claimants lose out as Claims Firm goes bust!

*MF*

Over 350 clients have lost thousands of pounds in fees after a claims handling company went into administration

Day Cooper Adams dissolved, having taken fees upfront for taking misselling complaints to the Financial Ombudsman Service (FOS), but it also had received payments from FOS, which were due to be paid to the victims of misselling.

Money Management has learnt, however, that this money may never be reunited with hundreds of clients as they will be second in line for payment after HM Revenue and Customs (HMRC).

The business had £4,600 in the bank when it went into administration, but owed HMRC £10,000 in unpaid VAT.

FOS never received some of the outstanding misselling claims when the claims chaser went into administration, even though the business charged steep upfront fees.

Most of the complaints are believed to be in relation to State earnings related pensions (SERPs) and payment protection insurance (PPI) policies, although claims for other products were also on file.

Excerpts from here:

http://www.ftadviser.com/FTAdviser/Regulation/Regulators/FOS/News/article/20090519/f2ca0ab6-438b-11de-a2c8-0015171400aa/Thousands-lose-FOS-payout-as-claims-firm-goes-under.jsp

dunstonh

Day Cooper Adams dissolved

That is good news. This company was well known for putting in false claims can telling lies to consumers to get them to part with money up front.

Most of the complaints are believed to be in relation to State earnings related pensions (SERPs) and payment protection insurance (PPI) policies, although claims for other products were also on file.

DCA really ought to be looked at by the police for fraudulent activity (making totally false claims to get people to pay up front when there was virtually no chance of success and keeping client money from upheld complaints rather than it being paid direct). Contracting out of SERPS was reviewed by the FSA (and SIB previously). In 1996, the SIB ruled that everyone that had contracted out was better off. The FSA did a review of the sales and found that 1.5% of those contracted out may have been mis-sold. They issued a free guide which has a flow chart to see if it applies to you or not. DCA cold called people to find out if they were contracted out and if they were they told them they HAD been mis-sold and were entitled to some money but you had to pay around £495 plus VAT up front. No mention of the fact you only had a 1.5% chance of success and no mention of the free FSA flowchart that tells you if you were potentially mis-sold or not. They also told people in contracted out defined benefit schemes they could claim as well (you get no choice but to contract out on those).

This company was a disgrace and its one less cowboy outfit out there to rip consumers off with false claims. Not much benefit to those ripped off but at least no new cases will be put through them.

I wonder if the FOS will review whether it should pay redress direct to consumer in future. This has been an issue in the past with some claims companies.