Brokers at risk from claims management companies
Brokers at risk
It is widely believed that brokers, in particular those involved in mortgages and loans, are in the firing line as the next target for Claims Management Companies desperate to replace their income as PPI mis-selling diminishes. To this end I am, along with other industry professional, meeting with MP’s in Westminster to support proposals for change on the 9th September.
To be blunt, the industry needs the support of brokers to deal with two major issues which, if unchecked, could drive up your PI costs and involve brokers in significant cost and abortive time spent dealing with spurious complaints. Worse still there are doubts, highlighted in the report available on the link below, as to the impartiality of any hearing brokers might receive.
- The first concern is that The Financial Ombudsman Service is unbalanced, does not make decisions in accordance with law, there is no right of appeal and the process is unfairly biased in the favour of CMC’s. If a claims company makes a false claim against you, you still have to fully investigate the matter, defend it and pay the FOS fees even if you win. These issues and many others have been recognised but the matter needs driving to a conclusion. Follow this link and the executive summary will show you the scale of the problem. The first page is definitely worth a read.
- There are little controls over the actions of CMC’s. They can effectively cold call your client and create a complaint. They can throw as much mud against the wall as they wish and it does not cost them a penny apart from a stamp. You still have to spend hours defending the claim and pay the FOS fees – win or lose. Of course, unless FOS changes its approach, there is stronger chance you might lose. Guilty until proven innocent has been the experience of many brokers and with awards up to £100,000 a possibility with no effective right of appeal, this certainly does not “treat the broker fairly”.
CMC’s are already starting to target the mortgage industry – What we can do?
Promise is working together with CherryPlc.co.uk to promote this campaign. Please support the industry by doing any of the following:
- Encourage your MP to attend the meeting on the 9th September by writing (Find your local MP here). You can use the CMC template letter here
- Forward this email to your fellow advisers and ask them to do the same
- Email your support to info@cherryplc.co.uk and all responses received will be forwarded to Nic Dakin MP
01902 585052
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Borrow £270,000 over 300 months at 7.1% APRC representative at a fixed rate of 4.79% for 60 months at £1,539.39 per month and thereafter 240 instalments of £2050.55 at 8.49% or the lender’s current variable rate at the time. The total charge for credit is £317,807.66 which includes £2,500 advice / processing fees and £125 application fee. Total repayable £587,807.66
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