We’ve written to justice secretary Kenneth Clarke. We’re challenging the government to tackle the claims handling industry – the companies who act on your behalf to manage claims such as PPI mis-selling.
The letter was co-signed by MoneySavingExpert.com founder Martin Lewis, chief executive of the British Bankers’ Association, Angela Knight, and Which? chief executive, Peter Vicary-Smith. We’re also requesting a meeting with Mr Clarke to discuss this issue further. Here’s what was said:
‘At a recent meeting senior representatives of MoneySavingExpert.com, Which?, financial services providers and the Financial Services Ombudsman discussed ways of improving confidence in the Payment Protection Insurance complaints system. This is a large scale issue, with almost £9 billion provisioned by institutions and affecting millions of consumers.
We agreed that more needs to be done to help those who have been mis-sold PPI, and together have committed to further action. However, we also believe the government has a critical role to play, to help consumers and the industry, by ensuring third party complaint handlers are properly regulated and bad practice is stamped out. Whilst we acknowledge the recent steps taken by the Ministry of Justice in this area, we believe further action is urgently needed.
There is significant evidence of rule breaking within the claims management sector, an industry that has grown significantly, and we believe that regulation and supervision of it has not kept up. Recent research from MoneySavingExpert.com and Which? found that a quarter of people did not know that CMCs take a fee, and only half knew that using a CMC would be no more successful than making the claim themselves. The result is that consumers are losing out now and will continue to do so unless action is taken.
Misleading advice, unfair contract terms and a lack of transparency about fees are all too common and there is very little consumers can do to gain redress when they occur.
It is likely that the bulk of the money being set aside for PPI redress will be distributed over the next year, so it is essential that urgent action is taken to encourage better supervision, self-regulation, tighter regulation and enforcement action against CMCs by the Ministry of Justice.
We are also concerned that the proposed consultation by the claims management regulator on the Conduct of Authorised Persons Rules is being delayed. Any delay in bringing forward much needed changes to help drive out the poor practice of some CMCs will only lead to further consumer detriment and additional costs across industry and the Financial Ombudsman Service.’
If we get the chance to meet Mr Clarke – and we’ll be pushing to ensure that we do – what would you like us to add to the agenda to ensure your views are heard? How do you think the badly behaved claims management companies should be dealt with?
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