use of claims management companies

michchick

hi new to the forum so bare with me.
need some info on a company i have started using to re claim fees etc from previous mortgage and credit card interest and a loan i have.the company is called life style claims based in swansea.i have payed the company an admin fee of 349.50 for the three claims i then got a phone call from the company last week saying that the claim is a litigation one and for the legal team to go ahead with the claim for the mortgage was a further 349.49 which i have paid. is this all ligitimate or am i being conned? they have sent me more paper work to fill in for the mortgage audit and details of the mortgage broker that dealt with the mortgage deal at the time just need some reasurance i'm doing the right thing please help!

dunstonh

is this all ligitimate

Yes and no.

You should not be cold called on any matter which could result in legal action being taken. The solicitor should not be taking this on either. However, the contract you agree to often has these little clauses in and if you agree to them then that is your choice.

they have sent me more paper work to fill in for the mortgage audit and details of the mortgage broker that dealt with the mortgage deal at the time just need some reasurance i'm doing the right thing please help!

What are they trying to claim? Mortgage administration is irrelevent for things like PPI. The only thing I can think they are trying for is unenforceable credit but thats a dead duck since the court rulings in December 09 (and subsequent cases which keep finding in favour of the lenders). There are some dodgy claims companies that keep on with this unenforceable credit issue and the OFT and MoJ have issued warnings to people not to pay firms for this.

So, if its unenforceable credit that you are trying for with this claims company then you are just wasting your money. You will never see it again.

michchick

hi thanks for reply the guy i spoke to from life style claims sugested it was a litigation claim against the mortgage broker as he had claimed too much commissions and fees etc when he set up the mortgage for us and also that the mortgage themselves(northern rock) had charged too much still dont understand it all

dunstonh

the guy i spoke to from life style claims sugested it was a litigation claim against the mortgage broker as he had claimed too much commissions and fees etc

There is no law or FSA rule on how much commission can be taken or charge made. There has only been one successful court case in this area (all others have failed). In that case it was only because the broker did not disclose the amount of the commission and took a fee at the same time. If the commission was disclosed then the case would have failed. The court ordered the amount of the commission to be paid to the client. The commission was a couple of hundred quid. The court case cost tens of thousands.

Northern Rock paid a commisison of about 0.3%. So, in the unlikely event you win the case, you would expect a similar ruling of 0.3% of the amount of the borrowing to be awarded to you. Chances are that is less than the amount you have paid/will pay the claims company.

also that the mortgage themselves(northern rock) had charged too much

Thats a no-goer as well.

Basically you are being ripped off on the odds of something like 1 in 100 chance of succeeding with the gain if you do succeed likely to be tiny.

podperson

Please be very careful if you are reclaiming on your mortgage and make sure you know exactly what it's for. There was a big flurry of reclaiming on mortgage charges, early redemption fees etc a while ago but recently there have been massive problems with people having to take it all the way to court and due to a clause that is in most mortgage contracts saying that you are liable for legal costs resulting from anything to do with your mortgage then people have been stuck with massive costs for the other sides legal bills.

mjm3346

Throwing good money after bad.

magpiecottage

podperson wrote: »

recently there have been massive problems with people having to take it all the way to court and due to a clause that is in most mortgage contracts saying that you are liable for legal costs resulting from anything to do with your mortgage then people have been stuck with massive costs for the other sides legal bills.

If a case goes to court then if the amount is above the small claims limit the winner is likely to be able to claim the cost from the loser regardless of whether there is a contractual right to or not.

If it is under the small claims limit they cannot. A clause allowing them to charge if it goes to the Financial Ombudsman Service would generally be considered unfair unless the complaint was frivolous (i.e. silly), vexatious (made out of spite) or fraudulent.

This last point is interesting because a couple of years ago Abbey Life put provision for it into their contracts. They were hauled up by the FSA because of some ambiguity in the wording but the revised version still allowed it to be included and to include anything said on the consumer's behalf and with their consent. This seems to allow Abbey Life to recover costs incurred from a customer if they employ an ambulance chaser who tells porkies.

The concern here is that the CMC is going down the litigation rather than the FOS route. That seems risky to me.

michchick

thanks to all replys goin to phone company tommorow and ask for refund

nattajack2000

I have just been contacted via phone from Lifestyle financial about a mortgage we took out through Mortgage Matters 10 years ago and remortgage 4 years ago advising that we were charged too much broker fees and inflated interest rate from Northern Rock. They wanted me to pay £499 over the phone as a deposit that would be refunded back to me once the case was paid out or if the case could not be completed. I've not proceeded with this for 2 reasons, 1. I don't have £499 and 2. I don't trust them!! Anyone else had the same thing? If these type of companies are saying we paid too much on broker fees etc is there a way we can reclaim this back ourselves rather than going through Lifestyle financial?? Diane

dunstonh

I have just been contacted via phone from Lifestyle financial about a mortgage we took out through Mortgage Matters 10 years ago and remortgage 4 years ago advising that we were charged too much broker fees and inflated interest rate from Northern Rock.

That is what many of the scam calls use as an "excuse".

They wanted me to pay £499 over the phone as a deposit that would be refunded back to me once the case was paid out or if the case could not be completed.

Looking increasingly like advance fee fraud.

I've not proceeded with this for 2 reasons, 1. I don't have £499 and 2. I don't trust them!!

Good for you. These false claims are designed to get £499 out of you using totally fake reasons. They string you along for a couple of years whilst they build up a whole load of people paying £499. Then when they start to have to pay back more £499 than they are taking in, the company goes into administration and all those who havent had their £499 back lose it.

If these type of companies are saying we paid too much on broker fees etc is there a way we can reclaim this back ourselves rather than going through Lifestyle financial?? Diane

There is no FSA position on the size of broker fees. There is a general position that they should be fair but no-one has ever said what is fair. However, if they did it would probably be up to around £3000.

How much did you pay in broker charges?

magpiecottage

Mortgage Strategy, a trade journal for mortgage brokers, has started a petition to get the rules changed so that ambulance chasers who take cases without merit to FOS are charged a fee.

I appreciate that they are not necessarily flavour of the month but it does seem inherently unfair that an ambulance chaser can make up all sorts of lies with impunity whilst a totally innocent broker gets charged £500 (in addition to the cost of their own time) just to be told that they have no case to answer (which they already knew).

They are not looking to have a charge made to consumers or for genuine complaints, only those where an ambulance chaser is trying it on.

If you feel like supporting the petition you can do so here.

(I don't know why am telling you this it is doing me out of business as well!)