MSE News: Guest Comment: should you use a claims management PPI firm?

Former_MSE_Helen

This is the discussion thread for the following MSE News Story:

"Claims firms have jumped on the PPI bandwagon so Tony Boorman, from the Ombudsman, explains if you should use them ..."

Read the full story:
Guest Comment: should you use a claims management PPI firm?

marshallka

Its OK for the FOS to say don't use claims firms but when they will only look at who sold a policy and if the seller was not regulated then looking into the legal route and courts is the only option for some.

I think lenders have been taken to courts when Brokers have gone into administration and a policy was sold prior to regulations. And to tell you the truth, why shouldn't they. They all profited from a sale, the lender, broker and insurer often so when FOS can only look at regulated firms and sales made by regulated firms and insurers complaints are taking forever some would prefer to use a company and get what they can (realising they are going to be charged) rather than waiting in line at FOS some times told months later, we cannot help.

If FOS could widen their jurisdiction somehow then there would be no need for CMC's at all. Some have PROOF beyond PROOF of misselling but its not within jurisdiction, Perhaps the FOS could look into complaints whereby a firm holds a consumer credit licence regardless of how long ago it was. This would then open the gates to complaints about missold PPI for all and not a selected few. No-one is saying to change the rules at all because misrepresentation and negligence (all insurance should be sold in good faith) have always come into finance contracts and surely any finance firm holding a CCL by the office of fair trading should not be negligent to their customers or misrepresent themselves. They should be fit to do the business they are doing. They should not be deceitful.

Just my view here.

marshallka

I wish something could be done about the secured loans lenders who are often subprime and got unregulated brokers to sell their prooducts OR they tell consumers that it was sold by an unregulated broker when often it was clearly not. This sector are the worst culprits and sold the biggest loans/PPI's to the most vulnerable of people. Most would not have gone to subprime lenders IF they could have got a high street loan and yet these are the ones that are getting away with it mostly because of them being unregulated and outside of FOS jurisdiction. People have lost their homes here. I could name a few that I feel have done the worst damage to the insurance industry.

~Brock~

CMC's dont go down the legal route. They are not geared up for it, don't have the expertise, or access to funding to allow the cases to be brought.

Not only that, most of the bigger ones cold call in order to get their business - that alone excludes the prospect of legal action.

In addition, despite the flak I got on another thread for mentioning it, recent case decisions show that there is little prospect for success in court where the lender has got their records in order. The costs of losing, particularly a fast track trial, can be eye watering.

marshallka

~Brock~ wrote: »

CMC's dont go down the legal route. They are not geared up for it, don't have the expertise, or access to funding to allow the cases to be brought.

Not only that, most of the bigger ones cold call in order to get their business - that alone excludes the prospect of legal action.

In addition, despite the flak I got on another thread for mentioning it, recent case decisions show that there is little prospect for success in court where the lender has got their records in order. The costs of losing, particularly a fast track trial, can be eye watering.

Perhaps then the authorities need to step in and stop this and do something to help all those that have to resort to using them.

~Brock~

marshallka wrote: »

Perhaps then the authorities need to step in and stop this and do something to help all those that have to resort to using them.

They have done something. It's called the Financial Ombudsman Service

marshallka

~Brock~ wrote: »

They have done something. It's called the Financial Ombudsman Service

I mean for complaints not within their jurisdiction when someone has GOOD proof of being missold. Seems lots of these subprime brokers are going bust now and leaving it up the FSCS to sort out but lots were sold prior to 14th Jan 2005 so no recourse there. I suppose people will just have to submit against the actual insurers (which they are doing) and wait for FOS to sort them. Such a shame as it is taking so long though. I read somewhere too where the FSCS were thinking of passing the complaints from brokers that have gone into administration to the insurer too? If they are thinking along these lines then perhaps these insurer complaints will get completed at some stage soon.

dunstonh

In addition, despite the flak I got on another thread for mentioning it, recent case decisions show that there is little prospect for success in court where the lender has got their records in order. The costs of losing, particularly a fast track trial, can be eye watering.

There was a case not too long back where Black Horse won the court case. yet had the person used the FOS then it would almost certainly have been upheld.

The FOS is generally more consumer friendly than the courts are because it considers fairness as well as law. The onus is also more on the firm to prove no wrongdoing. Whereas the onus is more on the individual to prove wrongdoing if they use the courts.

Perhaps then the authorities need to step in and stop this and do something to help all those that have to resort to using them.

The FOS is free of charge to use. Claims companies are not. It takes virtually no work on your part to complain. Indeed, it can take more work using a claims company. At least it does if you use a genuine one. If you use a dodgy claims company then it may seem easier but then chances are they are putting in a one-size-fits-all template letter with a bunch of made up reasons rather than personal reasons.

I mean for complaints not within their jurisdiction when someone has GOOD proof of being missold.

The FOS is funded and covers firms that pay levies to the FSA. Levies that are based on regulated business. It would be wrong to include business that is not protected as the levies would not have been collected. So, firms not paying for the FSA and FOS would be able to mis-sell to their hearts content knowing that the good firms are paying for it.

marshallka

dunstonh wrote: »

The FOS is generally more consumer friendly than the courts are because it considers fairness as well as law. The onus is also more on the firm to prove no wrongdoing. Whereas the onus is more on the individual to prove wrongdoing if they use the courts.






The FOS is funded and covers firms that pay levies to the FSA. Levies that are based on regulated business. It would be wrong to include business that is not protected as the levies would not have been collected. So, firms not paying for the FSA and FOS would be able to mis-sell to their hearts content knowing that the good firms are paying for it.

BUT there are still jurisdcition issues where sales of PPI are concerned and the sub prime lenders get away with it all the time by "saying" some dodgy unregulated broker sold it and know you cannot go to FOS. This is where insurer complaints are coming in quite rightly too. All 3 benefited from the sale, broker, lender and insurer and one of them should be liable for the complaint.

Perhaps where a complaint is passed from a lender to a broker and the lender KNOWs the broker would not be within jurisdiction of FOS (we know that is why they "say" it was sold by a broker often when it was not!!) then the lender should pass the complaint direct to the insurer. Surely FIRMS know the rules on FOS and know when their own sales brokers were regulated from and whether they were members of GISC etc. People are being passed from pillar to post and waiting 8 weeks here and 8 weeks there and the complaint is still not with the correct firm.

~Brock~

I know where you are coming from marshalka, but the question of "what rules were actually broken" remains.

Pre 2005 there were no formal rules. There was the voluntary code of conduct that was GISC, but if the seller was not signed up to this then there was nothing else.

Whilst this may seem to be poor justice it is also a fact of life. Undertaking court proceedings would meet with the same problem because the courts are there to uphold laws. They cannot rule against someone over something that is not covered by law.

marshallka

~Brock~ wrote: »

I know where you are coming from marshalka, but the question of "what rules were actually broken" remains.

Pre 2005 there were no formal rules. There was the voluntary code of conduct that was GISC, but if the seller was not signed up to this then there was nothing else.

Whilst this may seem to be poor justice it is also a fact of life. Undertaking court proceedings would meet with the same problem because the courts are there to uphold laws. They cannot rule against someone over something that is not covered by law.

If FOS is going to make insurers responsible for claims where brokers/firms were unregulated and not signed up to GISC then ALL CMC's will be out of a job so that should halve the MOJ job of regulating them (or not half the time because they close down and reopen by the looks of this site but then again so do finance firms in the sub prime area!!).

Surely Insurers had rules to follow on who sells their policies? I know I read a few articles on this just lately.