Claims management company (CMC) complaints - ask the ombudsman your question
Comments
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Alpine_Star wrote: »In the Common mistakes made by CMC customers and how to avoid them it says:
''1. Be aware of which accounts the CMC are going to make a claim about on your behalf. Most CMCs’ contracts will say that they are going to look into all of your accounts and, if you have joint accounts, they may look at these too. Be aware of which accounts the CMC are going to work on and let them know if there are any accounts you do not need their help with, put this in writing (an email is fine).''
I don't know how that's going to work. How can you unilaterally vary the terms of the contract by simply sending an e-mail?
CMCs who's contracts mean that you assign the rights to PPI claims on any account you might have had and for which there is no specified end date are unfair especially because it can make it very expensive to cancel and LeO shouldn't tolerate them.
This is the correct answer. It is one thing for someone to seek representation on a specific issue that they have a grievance with (though completely unnecessary in most instances). It is another entirely to ask you to sign an open ended contract which allows them to make what usually amount to a series of utter fishing expeditions on your behalf.0 -
The subsequent issue with the 'Have I got PPI' model is that after the fishing exercise has been completed, the subsequent claims they make to the individual lenders are based on completely fabricated series of allegations.
This is a clear breach of Section 2 of the Fraud Act 2006 and it is a complete and utter joke that this practice has been virtually ignored by the relevant regulators since the day these firms crawled out from under their stones.
I agree 100%. The only work some CMCs will carry out is asking all the major lenders whether you have had PPI with them. They then reel off a series of standard letters which are either completely contradictory (you never signed up for PPI but at the same time you were told it was compulsory, you had 12 months sick pay but were self employed...) or utterly irrelevant (single premium complaints about credit card PPI, sick pay complaints about unemployment only MPPI policies). I'm not sure to what extent the good folks from LEO understand these issues as they are obviously latercomers to the PPI party. The CMCs then claim they are entitled to a proportion of redress as the contract signed related to any and all cases.
It is fraud you are correct and should not be tolerated. However, it is a situation partly created by the banks' own inertia and partly by the mass stampede of complaints which is only just starting to clear. In the early days of the PPI scandal when I was working as a complaint handler, it was obvious that several well known CMCs were following this route and sending template letters for every account. However, several banks were just settling small value cases without even considering the merits as it was less hassle and there was no proactivity with regards to sharing notes and making the CMR aware of this. It is only after the majority of the stable has bolted that they have started making an effort to close this particular stable door and liaising with the CMR about it. Nonetheless, anyone who has had a PPI complaint submitted without the CMC making any effort to ascertain their circumstances at the point of sale or the information provided to them really ought to be refusing to make any payment to them as the CMC has effectively made them an accessory to fraud.
Rant over.0 -
Does the LeO hide behind rules that desire a get out clause. In example like passing the buck between the FCA, SRA, LeO. I ask this as in my case the provider was found effectively guilty of 'Conflict of Interest' after documents provided by the legal provider showed they had begun to serve the opposite party 82 days and 45+ work entries before MY insurer received a claim against my policy for RTA injuries. The documents also showed a phantom passenger had worked into the equation which was ignored by the Ombudsman! Even after all this the Legal service provider owned by an ABS CMC type company valued in the same year at over £3BILLION was given a £100 fine. If this does not remedy the Ombudsman service as being Unfair and very Biased toward larger firms I do not what else could constitute this statement.0
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The LeO should bear in mind that when they refer to a CMC as not giving appropriate, Unfair and unreasonable time to pay an invoice charge, they should also accept criticism when an investigator for the Ombudsman submits his Recommendation Report 27 Hours after supplying a complainee large data to look through in order to sanctify his / her concerns!:A0
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If this does not remedy the Ombudsman service as being Unfair and very Biased toward larger firms I do not what else could constitute this statement.
Hello Inventist,
We are sorry that you feel that we have been biased towards the firm you have complained about. The Legal Ombudsman is an independent and impartial scheme and our job is to look at complaints about service providers in a fair way without taking sides.
We can see that you refer to a fine. The Legal Ombudsman is not responsible for fining service providers; that would be for their regulators. If we find that there has been poor service, we can recommend financial remedies, such as a reduction in fees or compensation. Any remedy will be based on the individual circumstances of the complaint and what the impact of the poor service has been.
[FONT="]If you are unhappy with any aspect of how your complaint has been dealt with, please contact your investigator who will be happy to discuss your concerns.
[/FONT]“Official Company Representative
I am the official organisation representative of the Legal Ombudsman service. MSE has given permission for me to post. You can see my name on the organisations with permission to post list. I am not allowed to tout for business at all. If you believe I am please report it to forumteam@moneysavingexpert.com"0 -
In your 'Complaints in Focus' published on Wednesday there is the case study of Mrs A which I'd like to discuss, which I assume is ok as you publish case studies for the purposes of 'transparency' in order for the public to 'better understand' how you work.
In summary the CMC knowingly over charged the customer by 500% and failed to even acknowledge her 4 attempts at raising the issue over a 6 month period.
Additionally the CMC failed in its regulatory obligations (and no doubt it's own T&Cs) to update her on her claims for a staggering 4 years.
When the customer attempted to cancel the contract (if it could be said it still had any legal standing) the CMC attempted to further fleece Mrs A with an eye-watering £2000 'cancellation' charge.
Yet somehow the Ombudsman identifies the above as merely ''service issues'' and considered it justified that the CMC should be awarded £500 from the customer, despite this meaning that the customer would have paid a total of £740 in fees for receiving a single successful claim amount of £800.
1) What was the £500 charge in respect of and does the Ombudsman believe this represents value for money?
2) Do you believe that in publishing this case study it promotes confidence in the public for the Ombudsman to provide a fair and impartial service?0 -
Alpine_Star wrote: »1) What was the £500 charge in respect of and does the Ombudsman believe this represents value for money?
2) Do you believe that in publishing this case study it promotes confidence in the public for the Ombudsman to provide a fair and impartial service?
[FONT="]Hello Alpine Star,[/FONT]
[FONT="]We look at the service provided by claims management companies and so where we find elements of poor service, this will always be classed as a ‘service issue’. [/FONT]
[FONT="]In this case, both parties agreed to a reduction in the bill to £500. As such, the complainant was satisfied that there were some cancellation charges to be paid out. [/FONT]
[FONT="]We do believe that is shows we provide a fair and impartial service, as this was a resolution agreed to and supported by both parties. We are not in the business of imposing resolutions when one has already been mutually agreed. [/FONT]“Official Company Representative
I am the official organisation representative of the Legal Ombudsman service. MSE has given permission for me to post. You can see my name on the organisations with permission to post list. I am not allowed to tout for business at all. If you believe I am please report it to forumteam@moneysavingexpert.com"0 -
Legal_Ombudsman wrote: »[FONT="]Hello Alpine Star,[/FONT]
[FONT="]We look at the service provided by claims management companies and so where we find elements of poor service, this will always be classed as a ‘service issue’. [/FONT]
[FONT="]In this case, both parties agreed to a reduction in the bill to £500. As such, the complainant was satisfied that there were some cancellation charges to be paid out. [/FONT]
[FONT="]We do believe that is shows we provide a fair and impartial service, as this was a resolution agreed to and supported by both parties. We are not in the business of imposing resolutions when one has already been mutually agreed. [/FONT]
It's difficult to see where you provided any service at all in this case.
Is this really a case of ''poor service''? I think most right thinking people would more accurately categorise the CMC's conduct as dishonest and fraudulent.0 -
Legal_Ombudsman wrote: »[FONT="]We are not in the business of imposing resolutions when one has already been mutually agreed. [/FONT]
Just on this point it highlights the fundamentally different approach you have to that of the Financial Ombudsman.
They describe their function as ''Our role is to reach a fair and reasonable decision about the complaints we look at'', meaning that it is they who will decide the outcome of a case.
This contrasts with yourselves: ''we will look for opportunities to resolve your problem that you and your service provider can agree to, in order to resolve your complaint as quickly as possible for you'' meaning that you'd rather avoid having to make a decision yourself and prefer that the outcome of cases were mutually decided by the complainant and service provider, regardless of what you believe the outcome should be.
So the Legal Ombudsman is first and foremost mediation service and not an Ombudsman as such.
Of the 478 'resolved' complaints you have you state that 53% ''required a remedy to put things right for the customer'' but of that 53% how many were remedied by way of a mutual agreement between the 2 parties and how many were decided by an Ombudsman's decision?0 -
I think Alpine Star has in mind the "wider issues" role of FOS, which will look beyond the letter of what a complainant actually says.
FOS explains this here. In particular, in Green Denman v Financial Ombudsman Service [2003] EWHC 338 (Admin), the High Court found in favour of FOS.
In particular, the judge said:
"Most complainants are insufficiently versed in the complexity of the subject and would be unable unassisted to assess whether the advice they were given was sound or inadequate.
It is for this reason that they turn to financial advisers for advice; it is because their relative ignorance renders them vulnerable that financial advisers are regulated; it is for that reason that financial advisers were required to review their pensions advice; and it is to provide an informal but informed adjudicator that the financial ombudsman scheme was established."
There seem to be to be parallels in disputes between complainants and CMCs.
After all, any consumer capable of taking on a CMC and properly understanding the rules would have no need to employ them when FOS is free and would look at general fairness automatically.0
This discussion has been closed.
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