Two years ago the Legal Ombudsman opened its doors to complaints about claims management companies (CMCs) from the public.
Use of the service quickly gathered momentum with approximately 23,000 consumer contacts in Year 1 and approximately 32,000 in Year 2. To date, the Legal Ombudsman has accepted 4,683 complaints for investigation.
Kathryn Stone OBE, Chief Ombudsman said, “The Legal Ombudsman has made a difference to hundreds of people’s lives over the last two years, investigating the service provided by CMCs and where appropriate, recommending financial and non-financial remedies.”
A recent user of the Legal Ombudsman’s service said, “The lady I spoke to on the phone, was extremely helpful. I have never found myself in a situation like this before and, as well as contacting the company I am having a problem with, she gave me advice on other ways I may be able to retrieve my money. I cannot think of any way you could improve your service. As far as I am concerned it was an excellent service.”
The two main areas of complaints received relate to delay (22%) and CMCs failing to refund upfront fees as agreed (27%). Complaints about delay include failure by the CMC to issue claims to the lender within a reasonable timeframe and failing to keep customers updated on the progress of their claims.
As well as investigating individual consumers concerns, the Legal Ombudsman has also had an impact on the wider claims management industry. The Legal Ombudsman adopts a tough but fair approach when trends are identified in a CMC’s service. In instances of systemic poor service, the Legal Ombudsman can publicise their decision if they believe there is a risk to consumers.
In August 2016, the Legal Ombudsman published information in the public interest about JAS Financial Advisory Services Ltd (JAS). Numerous complaints cited that JAS were not progressing claims, they were failing to keep consumers updated on progress and often failed to reimburse upfront fees. After trying to engage with JAS, the Legal Ombudsman exercised their power to publish details of the trends as it was in the public interest to do so. JAS have since closed and the Legal Ombudsman played an important role in assisting over 500 consumers, some of whom were able to claim a refund under section 75 of the Consumer Credit Act 1974, others registered as creditors with the liquidator.
Another aim of the Legal Ombudsman is to feedback to CMCs to help them improve their service to their customers. The Legal Ombudsman runs a relationship management programme for CMCs offering guidance and is committed to regularly delivering professional learning courses. As a result the Legal Ombudsman has seen a marked improvement in the quality of complaint responses CMCs issue to their consumers.
Prior to January 2015, there was no avenue of redress for consumers who experienced a service that was less than reasonable. The Legal Ombudsman intends to continue to build on the successes of the last two years and is committed to helping improve standards in the industry as a whole.