|January 2013Is there anything more irritating than receiving your tenth text telling you that you are due a big rebate on an insurance policy you never had? For me, as nuisances go, it’s just ahead of the weekly silent unsolicited calls I get at home offering “technical help” on my non-existent pc problems. That great cold calling breakthrough, “Power dialer” (note the Americanism) software is the mechanism now pouring this stuff out to us.
It’s good to see a few recent set backs for these practices. You may recall the hero who successfully sued a telesales company for wasting his time in October. Now we have news that over 200 rogue Claims Management Companies (“CMCs”) have been shut down by the Ministry of Justice in the last six months alone. CMCs are the firms offering to assist claimants in the pursuit of compensation for wrongly sold financial products.
Which?, the consumer group, have been pretty vocal about some CMCs. They recently said “Far too often consumers are being ripped off by unscrupulous CMCs, when they can easily reclaim the money by themselves for free." On their website they go further, saying;
“If you have a complaint against a financial services company then there is no need to spend money employing a claims handler. There are already simple processes in place for resolving complaints consumers can use themselves without the help of a claims company and the often high upfront fees they charge.”
It is this last point which is key. The CMCs business model is fee based, perhaps charging both fixed administration fees and/or success related fees of up to 25% of the amount “won”. Which? makes the point that complainants can go direct to the organisation they believe has done the misselling and be supported, at no cost, by the Financial Ombudsman Service who deal with the same matters.
I understand that a helping hand who appears to operate on a “no win no fee” basis could be attractive but would urge careful research before proceeding. You may be thinking “well he would say that wouldn’t he” but independent data suggests that claims via CMCs are no more successful than those made directly by complainants. That’s certainly our experience, indeed we gets several letters a month from CMCs seeking redress where the customer never had the product which is the basis for the complaint. This “spamming” approach is no use to anyone.
Everyone has a right to complain and be heard - but before signing up with a CMC, be sure you know the facts. The Which? Website (below) is good place to start.