'Don't deal with rogue chasers'

03/05/2007

Advisers should refuse to deal with any claim management firm that is not registered on the Department for Constitutional Affairs’ list of authorised firms, says Aifa. It says advisers should deal with the complainant directly in these cases.

The calls come amid revelations that the claim management industry is taking in £75m a year from endowment mortgage complaints, according to a baseline report from the DCA issued to coincide with the start of regulation last week. Aifa predicts this figure will fall now the firms are regulated.

The DCA has published the report and other statements outlining its policies.

The claims management regulation monitoring and compliance unit, which is based at Staffordshire’s trading standards office in Burton-on-Trent, says the main problems with endowment claim companies involve misleading information on websites, in particular, the use of scare tactics and contracts that are weighted against consumers.

The unit says these issues are being dealt with at the application stage when companies apply for regulation. It says this combined with scrutiny of contracts and client account rules should remove much of the scope for malpractice.

The DCA has issued a risk framework detailing possible concerns when looking at claim firms. These concerns include firms with a history of illegal activity, prosecutions or regulatory action, involvement in high-pressure selling or improper generation of leads.

DCA head of claims management regulation Mark Boleat says: “Regulation has put in place vital safeguards for consumers when using the services of claim management companies and I am confident that it will also help raise standards across the industry.”

Aifa director of public relations Tracey Mullins: “These figures are absolutely disgraceful. There is no place for claim-chasers in the industry. Many of these businesses should disappear under regulation.”

Advisers should check the DCA’s register now and refuse to deal with any claim management firms that are not on the list but they still have to deal with the complaint

Original Article: Money Marketing