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CSC press release - CLAIMS MANAGEMENT TRADE BODY CONDEMS UNLAWFUL COMPANY
The Claims Standards Council (CSC) today dismissed claims by a former claims management company – whose licence to operate was recently withdrawn by the Ministry of Justice – that the whole claims management industry has been a blatant failure. The Council views the company’s proposed protest outside the offices of the OFT as nothing more than a cheap publicity stunt to promote the company’s business activities – the type of activities which have already been described by the Office of Fair Trading as unlawful (see the link below) and likely to cause consumer detriment
With regard to regulation of claims management companies, the Council believes that the initial scrutiny by the MOJ of applicants who wish to be regulated sifts out many businesses that are not considered fit for authorisation. This is backed up by subsequent enforcement by the MOJ should rules be breached by authorised companies. Commenting on the announcement, CSC spokesman, Andrew Wigmore said, “This is a very strong sanction, as people running unauthorised businesses which offer claims management services are committing a criminal offence”.
A particular growth area in the claims sector has been financial mis-selling claims. This area of activity developed some 4-5 years ago, focussing on the millions of endowment policies mis-sold by the banks. Billions of pounds in compensation were obtained for consumers as a result. Due to time-barring of endowment complaints, the sector has now gravitated towards mis-sold payment protection Insurance policies and more recently loan unenforceability claims.
According to the Council spokesman, when the regulation of claims management companies was first mooted, the focus was on personal Injury claims – there were hardly any financial claims companies at the time. “The rapid expansion of the financial claims sector has lead us to set up a specialist division of the CSC – The Financial Claims Standards Council – which will be officially launched next month” states the Counsel spokesman. “The aim of the F-CSC is to liaise with Regulators and other Stakeholders to ensure that the financial claims industry operates to the highest standards. This means providing clear and accurate information to consumers on the services being offered, providing high quality service, and above all ensuring accountable for any short-comings” adds the spokesman.
As new claims areas develop, the Council works with Regulators and Stakeholders to ensure that best practice is being adopted and works closely with the MOJ on the formulation and introduction of new regulatory requirements to ensure consumers’ interests are well served. The Council spokesman refers to the recently introduced marketing guidelines relating to unenforceability claims. “This demonstrates that as new areas emerge, we move quickly to ensure that marketing activity incorporating misleading, extravagant or unsubstantiated claims are stopped” states the CSC spokesman.
Commenting on the new F-CSC division, the Concil spokesman commented “Our research amongst members shows that consumers still lack information – many have never heard of the Financial Ombudsman Service or don’t appreciate what bearing the service has on them. There is similar ignorance in respect of the OFT and the FSA. Consumers therefore tend to get advice from the websites of claims management companies. The F-CSC will be launching a consumer –friendly unbiased information service, helping consumers understand their rights of redress if they have been victims of mis-selling and guiding them through the options available to them to should they wish to pursue a claim in such circumstances”
For further information or comment please contact The Claims Standards Council – 0870 4446454
The Claims Standards Council (CSC) today dismissed claims by a former claims management company – whose licence to operate was recently withdrawn by the Ministry of Justice – that the whole claims management industry has been a blatant failure. The Council views the company’s proposed protest outside the offices of the OFT as nothing more than a cheap publicity stunt to promote the company’s business activities – the type of activities which have already been described by the Office of Fair Trading as unlawful (see the link below) and likely to cause consumer detriment
With regard to regulation of claims management companies, the Council believes that the initial scrutiny by the MOJ of applicants who wish to be regulated sifts out many businesses that are not considered fit for authorisation. This is backed up by subsequent enforcement by the MOJ should rules be breached by authorised companies. Commenting on the announcement, CSC spokesman, Andrew Wigmore said, “This is a very strong sanction, as people running unauthorised businesses which offer claims management services are committing a criminal offence”.
A particular growth area in the claims sector has been financial mis-selling claims. This area of activity developed some 4-5 years ago, focussing on the millions of endowment policies mis-sold by the banks. Billions of pounds in compensation were obtained for consumers as a result. Due to time-barring of endowment complaints, the sector has now gravitated towards mis-sold payment protection Insurance policies and more recently loan unenforceability claims.
According to the Council spokesman, when the regulation of claims management companies was first mooted, the focus was on personal Injury claims – there were hardly any financial claims companies at the time. “The rapid expansion of the financial claims sector has lead us to set up a specialist division of the CSC – The Financial Claims Standards Council – which will be officially launched next month” states the Counsel spokesman. “The aim of the F-CSC is to liaise with Regulators and other Stakeholders to ensure that the financial claims industry operates to the highest standards. This means providing clear and accurate information to consumers on the services being offered, providing high quality service, and above all ensuring accountable for any short-comings” adds the spokesman.
As new claims areas develop, the Council works with Regulators and Stakeholders to ensure that best practice is being adopted and works closely with the MOJ on the formulation and introduction of new regulatory requirements to ensure consumers’ interests are well served. The Council spokesman refers to the recently introduced marketing guidelines relating to unenforceability claims. “This demonstrates that as new areas emerge, we move quickly to ensure that marketing activity incorporating misleading, extravagant or unsubstantiated claims are stopped” states the CSC spokesman.
Commenting on the new F-CSC division, the Concil spokesman commented “Our research amongst members shows that consumers still lack information – many have never heard of the Financial Ombudsman Service or don’t appreciate what bearing the service has on them. There is similar ignorance in respect of the OFT and the FSA. Consumers therefore tend to get advice from the websites of claims management companies. The F-CSC will be launching a consumer –friendly unbiased information service, helping consumers understand their rights of redress if they have been victims of mis-selling and guiding them through the options available to them to should they wish to pursue a claim in such circumstances”
For further information or comment please contact The Claims Standards Council – 0870 4446454
