Dispute with Direct Redress over Barclays PPI refund

sassanderson

Hi – I am currently in a dispute with Direct Redress concerning work they carried out with Barclays Bank on my behalf and I wondered if anyone has found themselves in a similar situation or can offer any insight as to where I stand legally. I will lay out my case with as many facts as possible and would be very grateful for any advice…

In 2011 I instructed Direct Redress to retrieve funds that I was owed by several companies due to the mis-selling of PPI, one of which was Barclays Bank. Following the work they did on my behalf, Barclays offered a refund in April 2012. Direct Redress advised me to accept this offer, which I did, and a percentage was paid to them as a fee. At that time I believed Direct Redress had conducted thorough research into the time period I had been paying PPI and independently calculated the amount I was entitled to receive. I relied on the expertise of Direct Redress to guide me through a process I knew very little about and, given the amount of money I paid for their services, I was confident that their calculations regarding my PPI claims were correct.

At the point of paying their invoice, as far as I was concerned, the work I instructed Direct Redress to do in relation to this particular claim with Barclays was complete.

I have now discovered, two years later in 2014, that the amount I accepted was only a fraction of what I was actually entitled to. This discovery was made following an internal investigation by Barclays, who discovered, acknowledged, and rectified their mistake, all without any further input from Direct Redress since the original refund in 2012 - I simply received a refund directly into my Barclays bank account along with a letter from Barclays explaining what it was for. I understand that many people nationwide also received similar further refunds.

Shortly afterwards I received an invoice from Direct Redress who are making a claim for a percentage of this second PPI refund, having not contributed anything towards the successful outcome. They did not carry out any work on my behalf to justify the monies they are claiming and, in fact, the company could have been directly responsible for the loss of a considerable amount of my money had Barclays not conducted their own internal investigation.

After appealing and fully stating my case to Direct Redress I received a response to inform me that they have investigated but as they raised the initial complaint with Barclays back in 2012 they feel they are entitled to claim against the further refund I have received.

I do not agree with this outcome and would like to appeal further. Direct Redress have made me aware that I have the right to refer my complaint to the Claims Management Regulator at the Ministry of Justice but state that the Regulator ‘cannot determine a complaint or award compensation’ – so what powers do they hold to assist me? Am I simply fighting a losing battle?

[Deleted User]

Yet another reason not to use a claim management company and a perfect example of them having no special ability to retrieve mis-sold PPI.


You could have done all this yourself for free.

-taff

https://forums.moneysavingexpert.com/discussion/5013413

dunstonh

In 2011 I instructed Direct Redress to retrieve funds that I was owed by several companies due to the mis-selling of PPI

That wording does not reflect what happens. There are no funds to retrieve. You make a complaint giving your reasons for complaint and if the seller agrees with you then they will pay redress (typically a refund of premiums plus interest).

At that time I believed Direct Redress had conducted thorough research into the time period I had been paying PPI and independently calculated the amount I was entitled to receive. I relied on the expertise of Direct Redress to guide me through a process I knew very little about and, given the amount of money I paid for their services, I was confident that their calculations regarding my PPI claims were correct.

On par with believing in Santa Claus and the Easter Bunny

I have now discovered, two years later in 2014, that the amount I accepted was only a fraction of what I was actually entitled to. This discovery was made following an internal investigation by Barclays, who discovered, acknowledged, and rectified their mistake, all without any further input from Direct Redress since the original refund in 2012 - I simply received a refund directly into my Barclays bank account along with a letter from Barclays explaining what it was for. I understand that many people nationwide also received similar further refunds.

Not an uncommon mistake. So, you are not alone.

Shortly afterwards I received an invoice from Direct Redress who are making a claim for a percentage of this second PPI refund, having not contributed anything towards the successful outcome. They did not carry out any work on my behalf to justify the monies they are claiming and, in fact, the company could have been directly responsible for the loss of a considerable amount of my money had Barclays not conducted their own internal investigation.

Also quite common for those using claims companies.

After appealing and fully stating my case to Direct Redress I received a response to inform me that they have investigated but as they raised the initial complaint with Barclays back in 2012 they feel they are entitled to claim against the further refund I have received.

And that is the response you would expect and to be fair, it is correct.

I do not agree with this outcome and would like to appeal further. Direct Redress have made me aware that I have the right to refer my complaint to the Claims Management Regulator at the Ministry of Justice but state that the Regulator ‘cannot determine a complaint or award compensation’ – so what powers do they hold to assist me? Am I simply fighting a losing battle?

Claims companies are very lightly regulated. Nothing like financial services companies. This is more of a civil matter than a failure of the light regulation that exists. So, the MoJ are not likely to be of any use.

Your choice is to not pay and almost certainly be taken to court for non-payment where a judge will decide. You will be able to state your opinion and the judge will look at the contract you signed. That will effectively decide the outcome. Most CMC contracts do cover future payments and all refunds on all accounts from that lender. So, you should check the contract you signed. Ask the claims company for a copy if you no longer have it. You may have to pay £10 for that as a data subject access request. However, as it is a fee dispute, you would expect them to provide this without charge to show you that you are liable.

The biggest problem you have is that you did not initiate the second review. Barclays did and they only did so because of the initial complaint. So, if you had not made the initial complaint, you would not get this extra redress. So, my non-legal point of view is that the CMC has the upper hand. However, if you want it to end up in front of a judge, it wouldnt cost you any more than a couple of hundred pounds (plus what you have to pay) if you lost. Whereas if you won, it would cost you nothing.

Plus, whilst the CMC may huff and puff and threaten legal action, you can settle it right up to the day of the court case with no futher cost. By then, you will have to provided in advance what their reason for taking you to court is and the evidence they are supplying to support their case. They may not have any evidence and my just huff and puff and eventually give up.

Alpine_Star

dunstonh wrote: »

Most CMC contracts do cover future payments and all refunds on all accounts from that lender.

I don't think this is right.


Unless there is a specific term that deals with events after the CMC has recommended the offer amount and the client has agreed and paid the commission asked of him, the implication is that the contract will have been deemed to have been concluded at that point.

CMC_fighter

There are no clear statements in relation to the end of a contract between a CMC and a client.

-taff

CMC_fighter wrote: »

CMCs are generally there to assist people in obtaining refunds from the banks for mis-selling a product to them. Your attempt to vilify them for providing this service is like a husband complaining his wife goes to a nail parlour...Of course there are things you can do yourself that other people can perhaps do better.

Yes, but no one better knows their own reasons for complaint than the complainer. And if they are able to read and write, they can do a better job than a cmc.

CMC_fighter wrote: »

You assume that a bank that originally mis-sold somebody thousands of pounds of insurance is going to suddenly become honest when dealing with a complaint is quite frankly laughable.

Using your own argument, why would they suddenly become honst when dealing with a CMC WHO HAVE NO SPECIAL POWERS AT ALL
and
USE EXACTLY THE SAME COMPLAINTS FORM AND PROCEDURE.....

WHICH IS FREE!

magpiecottage

CMC_fighter wrote: »

Your fabrication that CMCs are "lightly" regulated is both troubling and mis-leading. These companies will generally have annual visits from the MOJ to determine they are following best practice.Furthermore, they will inspect all advertisings including the wording of these and check all correspondence that are issued to customers.

So why do I regularly get complaints from CMCs telling me that the Fact Find I have in my other hand never existed?

Why do I get complaints that clients with existing endowments had no previous investment experience?

Why do I get complaints about PPI policies that never existed?

Why do I find that a complainant was told that they were complaining about the company providing the investment product and assured that the adviser, a personal friend would not get into trouble?

I am afraid that when it comes to regulation, a CMC has 12 pages of regulations. The FCA rulebook is estimated to be 10 THOUSAND.

Put it another way, if it was on 80 gsm (grammes per square metre) paper, the CMC's rulebook, which CMC fighter is supposed to adhere to would weigh 25 grammes.

The FCA rulebook, which dunstonh has to comply with would weigh about the same as a sack of potatoes.

So I think dunstonh is justified in his comment.

Of course there are things you can do yourself that other people can perhaps do better.

Of course Client Specific Rule 12 of the Conduct of Authorised Persons Rules 2014 (that tiny rulebook that CMCs are supposed to follow) says

"Where a claim is one that falls within the province of the Criminal Injuries Compensation Authority, the Financial Ombudsman Service, the Financial Services Compensation Scheme, the Housing Ombudsman Service or any other recognised dispute resolution procedure, the business must not suggest that a claimant will have
a more favourable outcome if he uses the services of the business."

Yet here we see somebody from a CMC blatantly doing just that. I think this demonstrates the contempt with which CMCs view their regulator.

You assume that a bank that originally mis-sold somebody thousands of pounds of insurance is going to suddenly become honest when dealing with a complaint is quite frankly laughable.

I am not a fan of, or an apologist for, the banks but, as you say,

Only this week Clydesdale Bank has been fined over 20m for lying and amending screenshots sent to the Financial Ombudsman Service.

That shows that banks are properly regulated and ARE found out and punished. Not so CMCs. Put "CMC Fine" into google and the only one that comes up is a fine not by the MOJ but by the Information Commissioner.

I have dealt with in my time thousands of clients that have been completely mislead by the banks in regards to their rights when pursuing a complaint.

Although I do not work for banks, in my experience they always inform complainants of their right to go to the Financial Ombudsman Service and the time limit for doing so. So, I do not believe you.

incorrect offers of redress.

But that brings us back to the OP's point. Why should they pay the CMC more when they failed to check the figures in the first place.

Without in depth knowledge of the financial rules you are certainly at a disadvantage when pursuing a claim for mis-sold PPI.

Except that the Financial Ombudsman Service is able to investigate free. That is why you have broken the rules of your regulator (again) by infering that you can achieve a better outcome than they can do themselves.

[quote[Banks have ran a campaign against companies that assist claimants and been helped in this by misguided people such as Martin Lewis, the truth is the less CMCs the less people will obtain a refund they now that and so does Mr Lewis.[/quote]

So visitors to this page must decide:

• Do they believe the Claims Regulator when it says that consumers will not achieve a better outcome using a CMC (and therefore bans the businesses it regulates from suggesting that they will) or do they believe a claims chaser who ignores that ban and says otherwise.
• Do they believe the Financial Conduct Authority when it says that consumers will not achieve a better outcome using a CMC or do they believe a claims chaser who ignores his regulator's rules to say otherwise.
• Do they believe the Financial Ombudsman Service when it says that consumers will not achieve a better outcome using a CMC or do they believe a claims chaser who ignores his regulator's rules to say otherwise.
• Do they believe the Advertising Standards Authority when it says that consumers will not achieve a better outcome using a CMC or do they believe a claims chaser who ignores his regulator's rules to say otherwise.
• Do they believe MSE.com when it says that consumers will not achieve a better outcome using a CMC or do they believe a claims chaser who ignores his regulator's rules to say otherwise.

Of course there are bad apples as in any industry

Yes - and those in financial services are actively looked out for by their regulator. They are made to put things right.

It does not happen in claims management. As far as I can tell, the claims regulator has never fined anybody. When I googled this, the only case of a CMC being fined that I discovered was EMC Advisory Services Limited, which was punished not by the Claims Regulator but the Infomation Commissioner.

believe me if not for these people the banks would get away with it having profited billions !!

I don't believe you.

I do believe, though that CMCs are getting away profiting millions (and probably billions) by telling people they cannot do it alone and then sending out pro forma letters with total disregard to whether the content is true or not.


However, the OP wanted to know if he had to pay the CMC more.

I think this is a moot point. Certainly if the CMC said it would check the calculations, there is a valid complaint on the grounds that if they had done so in the first place then there would not now have been a need to pay further redress. Put simply, the CMC was incompetent.

If, on the other hand, the contract simply said "we are entitled to X% of any redress payable" then it is a little weaker. However, it may be possible to argue that a contract of that nature which enabled the CMC to take a share of redress which was determined some years later amounts to an unfair term with the context of the Unfair Terms in Consumer Contracts Regulations 1999.

What the OP can do is make a complaint on those grounds and, if the CMC rejects it, take it to the Legal Ombudsman. This is quite similar in the way it operates to FOS. It is also free to the consumer.

Nasqueron

CMC_fighter wrote: »

Banks have ran a campaign against companies that assist claimants and been helped in this by misguided people such as Martin Lewis, the truth is the less CMCs the less people will obtain a refund they now that and so does Mr Lewis.

Funny that I have heard Martin Lewis on numerous radio and TV programs telling people to complain about PPI and advising how simple it is and how you can do it without needing a CMC and have just as much chance of success - if anything Martin Lewis is doing everyone (except CMCs and banks) a favour by reminding people about it.

Just the same as they have done with CPP and Sentinel!

dunstonh

Your fabrication that CMCs are "lightly" regulated is both troubling and mis-leading.

You are right that it is troubling. CMCs really need to be regulated much tighter than they are. However, it is not misleading. They are very lightly regulated.

Without in depth knowledge of the financial rules you are certainly at a disadvantage when pursuing a claim for mis-sold PPI.

Yet CMCs have no regulatory requirement to be aware of those rules.

You assume that a bank that originally mis-sold somebody thousands of pounds of insurance is going to suddenly become honest when dealing with a complaint is quite frankly laughable.

And putting in a one-size-fits-all template letter with fraudulent complaint reasons is helping?

Insider101

CMC_fighter wrote: »

In response to Dunston.

Your fabrication that CMCs are "lightly" regulated is both troubling and mis-leading. These companies will generally have annual visits from the MOJ to determine they are following best practice.

No they won't. The MOJ just don't have the resource. They will select a sample for either random visits or risk based monitoring in any given year. But they certainly don't visit all of them.

Furthermore, they will inspect all advertisings including the wording of these and check all correspondence that are issued to customers.

Nonsense

CMCs are generally there to assist people in obtaining refunds from the banks for mis-selling a product to them.

If providing this "service" was all they did then I think most people would take the line that if someone wants to potentially pay a large amount for something they can easily do themselves then it's their prerogative.

It's the constant high pressure telesales cold calls trying to pester people who either have never had PPI or don't think they were missold it into making complaints which are at best spurious and at worst outright fraud that most right-minded people have an issue with.

Your attempt to vilify them for providing this service is like a husband complaining his wife goes to a nail parlour...Of course there are things you can do yourself that other people can perhaps do better. You assume that a bank that originally mis-sold somebody thousands of pounds of insurance is going to suddenly become honest when dealing with a complaint is quite frankly laughable.

Read the other threads on the first page at the moment. There are 2 or 3 at least outlining how their original complaint was rejected and the people they engaged to provide this "service" failed to pursue it. Only for the bank to proactively review the matter and offer redress some years later.

I have dealt with in my time thousands of clients that have been completely mislead by the banks in regards to their rights when pursuing a complaint. this ranges from denial of the existence of PPI to incorrect offers of redress.

I am aware that people have previously been told they don;t have PPI when they do, however, it is generally due to not having records or people not knowing how to use the systems properly. As regards incorrect offers of redress, CMCs cannot help here, they lack the expertise to know if an offer is right or wrong and will usually only make a token protest if it is very low. There is another thread on page 1 with an example of this.

Without in depth knowledge of the financial rules you are certainly at a disadvantage when pursuing a claim for mis-sold PPI. Only this week Clydesdale Bank has been fined over 20m for lying and amending screenshots sent to the Financial Ombudsman Service.

You don't need to know any rules. Just how to write a basic letter. And it is against the MOJ's rules to suggest that you can get a better result than a client who complains directly.

Banks have ran a campaign against companies that assist claimants and been helped in this by misguided people such as Martin Lewis, the truth is the less CMCs the less people will obtain a refund they now that and so does Mr Lewis. Of course there are bad apples as in any industry but believe me if not for these people the banks would get away with it having profited billions !!

The campaign and the point of it is simple. People don't need to use you!!!