MSE News: Claims body attacks MSE and Which? over free PPI reclaiming

src007

magpiecottage wrote: »

But that misses the point - 100% of something is better than 70% of the same something - and both FOS and the MOJ insist that a CMC will achieve no better an outcome than pursuing the complaint yourself.

What if someone doesn't complain at all, how much will they get?

magpiecottage

src007 wrote: »

What if someone doesn't complain at all, how much will they get?

Since complaining is straightforward then they should get 100% if they feel sufficiently strongly about it to actually tell the firm they are dissatisfied.

However, they are incited to commit fraud by spam texts, e-mails and telephone calls. Please don't tell me it doesn't happen because it last did to me on Monday of this week.

dunstonh

I have no problem with complaints being made where there is wrong doing. That should be the case. It is where complaints are encouraged where there is no wrong doing and innocent parties are suffering costs and anguish for doing nothing wrong.

The banks have a history of bad advice in a large minority of cases. What they say verbally a lot of the time is lies or misrepresentation. IFAs suffer with that as either the person believes the bank or they put us in the same pot when it goes wrong. A survey a few years ago found that over half the people seeing tied agents (which are mostly banks) thought they were seeing an IFA.

So, you wont find much support from us with regards to bank quality advice (or lack of). The negativity towards CMCs is the fact that most are encouraging complaints for complaint sake and hoping they get lucky.

It is wrong to hit out at commission as CMCs take a far larger cut than the bank ever did. Bank staff either get bonuses or a small percentage. Investments would be something like 1%. CMCs taking 30% plus VAT is a massive commission.

src007

dunstonh wrote: »

I have no problem with complaints being made where there is wrong doing. That should be the case. It is where complaints are encouraged where there is no wrong doing and innocent parties are suffering costs and anguish for doing nothing wrong.

Its hard to say before an investigation is carried out if there is wrong doing. Although, I understand that there should at least be some grounds for a complaint before a letter is written. I completely agree though that IFAs get treated very badly in the system. I've never actually seen an IFA complaint upheld and its quite rare for the company I work for to start one. The mechanism in the system to stop this, is to label complaints 'frivolous and vexatious' when they are. It doesn't seem like that mechanism is working as it should be.

dunstonh wrote: »

The banks have a history of bad advice in a large minority of cases. What they say verbally a lot of the time is lies or misrepresentation. IFAs suffer with that as either the person believes the bank or they put us in the same pot when it goes wrong. A survey a few years ago found that over half the people seeing tied agents (which are mostly banks) thought they were seeing an IFA.

There should be more 'free' complaints at the FOS for businesses when there is a 'mass complaints' trend. As I'm sure you will be aware the FOS have made changes this year increasing the number without charge.

dunstonh wrote: »

It is wrong to hit out at commission as CMCs take a far larger cut than the bank ever did. Bank staff either get bonuses or a small percentage. Investments would be something like 1%. CMCs taking 30% plus VAT is a massive commission.

This isn't really a fair comparison. Investments are much larger than a refund (which is on average £2000-£3000). Most CMCs charge 25% + VAT but many less as well. Investments also charge 1% a year rather than a one off payment. There is nothing wrong with commission however in my case the bank lost 20% of my investment and were still taking their cut. Its like paying someone to burn your money. I wouldn't have minded paying them if they were earning me something!! I understand what the word 'risk' means as well before you bring it up.

The Blackhorse court case showed that they were taking 87% commission from PPI policies. Imagine if a PPI company stated that in their paperwork! The judge ruled that this non-disclosure didn't create an unfair relationship but I think the case is going the supreme court this year, so you never know what could happen?

http://www.shoosmiths.co.uk/news/4064.asp

~Brock~ wrote: »

CMC's will continue to exist and grow whilst there remains a complaints mechanism that is completely one sided against the financial services firms in that they get charged for the complaint regardless of the outcome. CMC's know this and thrive on the 'bribery' element that this introduces.

If all PPI had been sold as a regular premium priced at £6 per £100 of cover would there by a single PPI CMC? I think not.

dunstonh wrote: »

The negativity towards CMCs is the fact that most are encouraging complaints for complaint sake and hoping they get lucky.

Of course wouldn't expect there ever to be positive coments about CMCs on this site! I'm just trying to show that there is another side to the argument.

This is a thread for debate and it would be boring world if everyone agreed (although maybe if everyone agreed with me it wouldn't be so bad!).

dunstonh

Its hard to say before an investigation is carried out if there is wrong doing.

So why do the CMC template letters give all the potential mis-sale reasons whether they apply or not? Why do they go straight to complaint saying it was mis-sold if they are information gathering?

I completely agree though that IFAs get treated very badly in the system. I've never actually seen an IFA complaint upheld and its quite rare for the company I work for to start one.

They do exist but the ratios are typically very low. The biggest network in the UK (and you probably know who I am referring to as they are miles bigger than anyone else) had just 11 PPI complaints at the FOS. It isnt really an IFA issue but we are being dragged into it.

The mechanism in the system to stop this, is to label complaints 'frivolous and vexatious' when they are. It doesn't seem like that mechanism is working as it should be.

The FOS is notoriously difficult at getting complaints classified as that. I believe a previous poster hinted that it is because the adjudicator doesnt get paid their bonus if they do that. Plus, the FOS can be very liberal and tends to think no-one would make fraudulent complaints and really needs to be persuaded otherwise.

There should be more 'free' complaints at the FOS for businesses when there is a 'mass complaints' trend. As I'm sure you will be aware the FOS have made changes this year increasing the number without charge.

Yes. And IFAs using compliance companies/networks shouldnt be treated as all one group. i.e. A network of 1500 IFAs gets treated as one IFA and not each individual IFA firm.

If all PPI had been sold as a regular premium priced at £6 per £100 of cover would there by a single PPI CMC? I think not.

I would largely agree with that but it is not stopping credit card and MPPI complaints which are set up correctly.

Of course wouldn't expect there ever to be positive coments about CMCs on this site! I'm just trying to show that there is another side to the argument.

And I respect your position and understand that you may be the shining beacon in a cesspit. I know full well what influence bad apples can have on a profession. However, you must surely admit that the crooks and scammers in the claims industry are significant and if you are genuine and fair, then this must frustrate you more than it does us.

I am TPS registered. I am an IFA and therefore cannot be mis-sold insurance. Yet every week I get calls on my business line telling me that I have been mis-sold. I have had a fraudulent complaint (rejected with strong evidence showing it was rubbish). I know other advisers that have suffered including a young, new mortgage adviser who was almost in tears when he got his one and suffered a £500 FOS charge despite never selling PPI.

I place a lot of the blame at the door of the FSA. It deciding after decades to change its mind on how PPI was sold and then backdating it knowing full well companies wouldnt have information to support the sales did open the door to speculative and try-it-on complaints.

magpiecottage

src007 wrote: »

I've never actually seen an IFA complaint upheld and its quite rare for the company I work for to start one.

I am afraid your company seems to be very much the exception rather than the rule, then.

The mechanism in the system to stop this, is to label complaints 'frivolous and vexatious' when they are. It doesn't seem like that mechanism is working as it should be.

Absolutely it isn't. It is also a misnomer. Really to pursue a complaint when it is obvious that nobody has suffered is frivolous whilst pursuing one simply because your angry (i.e. vexed) is, by definition, vexatious.

Pursuing one when nobody evidence that a policy ever existed or it is pretty obvious that the complaint points are untrue is simply fraudulent.

And FOS adjudicators DO get an incentive for each case the "close" but not if it is "dismissed" without considering its merits.

Leaving aside the differences between my business and yours, that allows FOS itself to be corrupt.

There should be more 'free' complaints at the FOS for businesses when there is a 'mass complaints' trend. As I'm sure you will be aware the FOS have made changes this year increasing the number without charge.

This makes things WORSE for network members because they will not see any "free" cases and will be billed for £850 instead of £500.

This isn't really a fair comparison. Investments are much larger than a refund (which is on average £2000-£3000). Most CMCs charge 25% + VAT but many less as well. Investments also charge 1% a year rather than a one off payment.

Most IFAs charge less than 1% and, from the beginning of next year will not be able to take "trail" commission on new business.

There is nothing wrong with commission however in my case the bank lost 20% of my investment and were still taking their cut. Its like paying someone to burn your money. I wouldn't have minded paying them if they were earning me something!! I understand what the word 'risk' means as well before you bring it up.

Going to a bank for your financial planning is never normally a good move.

However, advisers do not actually make the fund investment decisions and there are (or at least were) rules that restrict performance based payments to firms.

The Blackhorse court case showed that they were taking 87% commission from PPI policies. Imagine if a PPI company stated that in their paperwork! The judge ruled that this non-disclosure didn't create an unfair relationship

I think this reflects a difference between investments and insurance.

With insurance you pay an amount in the knowledge that you will get nothing back unless you have to claim (which you hope you never will). Once the premium is paid the money is no longer yours.

By contrast, you take out an investment contract with the intention of claiming your money back at some point, because it IS still your money. So you need to know how much the charges (commission, running the investment, regulatory costs etc.) are going to affect what you will eventually receive.

As you say, though, we will see what happens - I am simply giving the reasoning.

If all PPI had been sold as a regular premium priced at £6 per £100 of cover would there by a single PPI CMC? I think not.

Actually the price chosen by the FSA as representative is £9 per £100 but I take your point.

The problem is that too many CMCs think not in another sense. That is why I see complaints that a single premium PPI policy was sold when in fact it was a monthly premium PHI. That the consumer did not know it had been taken out when in fact they had completed a lengthy application asking about their height, weight and medical history. That the consumer was told they had to take it out in order to get the loan when they were given a Key Facts document for their mortgage which specifically said they only had to take out buildings cover.

This is a thread for debate and it would be boring world if everyone agreed (although maybe if everyone agreed with me it wouldn't be so bad!).

Follow the FOS guidance and you might find I agree with you and uphold a real case.

Fail to send the FOS questionnaire, though, and expect me to report you to the MOJ.

dunstonh wrote: »

I place a lot of the blame at the door of the FSA. It deciding after decades to change its mind on how PPI was sold and then backdating it knowing full well companies wouldnt have information to support the sales did open the door to speculative and try-it-on complaints.

Section 6 of the Financial Services and Markets Act places a statutory duty on the Financial Services Authority to work to reduce financial crime involving, amongst other things, fraud and dishonesty.

In opening the door to this type of complaint, it has deliberately done the opposite.