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Chris Hannant: Time to ban claims firms from financial services
By Chris Hannant 26th February 2016 10:13 am
The Government is finally cottoning on to what the rest of us have known for some time: claims firms provide no useful purpose other than helping themselves.
The Ministry of Justice has just published proposals that will tighten up the rules under which they operate. But while this is very welcome, it does not go far enough.These companies are a cost to us but there is no need for them in financial services.
With the Financial Ombudsman Service a consumer needs no legal training, no expertise on regulation and no knowledge of what a firm should or should not have done. All they need is to be dissatisfied and know where to make a complaint. The FOS will investigate and look at different angles, so the consumer is protected from ignorance of how to frame it.
Why not ban claims firms from financial services?
While at this stage it is unlikely we will see such a drastic step, more needs to be done to curb the excesses. So in addition to the restrictions on compensation and fees, it is time to introduce a charge for claims firms to bring a complaint to the FOS. Fees paid by consumers should be capped to stop them being passed on.
This should incentivise claims firms to better vet cases and do their own research.
The Ministry of Justice proposals are a step in the right direction but I urge advisers and others adversely affected by these companies to push the Government to go further.
Chris Hannant is director general at Apfa
Chris Hannant: Time to ban claims firms from financial services
By Chris Hannant 26th February 2016 10:13 am
The Ministry of Justice has just published proposals that will tighten up the rules under which they operate. But while this is very welcome, it does not go far enough.These companies are a cost to us but there is no need for them in financial services.
With the Financial Ombudsman Service a consumer needs no legal training, no expertise on regulation and no knowledge of what a firm should or should not have done. All they need is to be dissatisfied and know where to make a complaint. The FOS will investigate and look at different angles, so the consumer is protected from ignorance of how to frame it.
Why not ban claims firms from financial services?
While at this stage it is unlikely we will see such a drastic step, more needs to be done to curb the excesses. So in addition to the restrictions on compensation and fees, it is time to introduce a charge for claims firms to bring a complaint to the FOS. Fees paid by consumers should be capped to stop them being passed on.
This should incentivise claims firms to better vet cases and do their own research.
The Ministry of Justice proposals are a step in the right direction but I urge advisers and others adversely affected by these companies to push the Government to go further.
Chris Hannant is director general at Apfa
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