Allay

**Celestine** · 10th September 2020, 09:01:AM

Can you please keep us updated when you get the Ombudsman decision. Good luck.

**paddy44** · 22nd November 2020, 11:31:AM

Originally posted by Celestine View Post

Can you please keep us updated when you get the Ombudsman decision. Good luck.

Hi i have received a decision from The Ombudsman service,

The complaint Mr K is unhappy with how Allay Claims Ltd dealt with his claims for mis-sold payment protection insurance (PPI). What happened In October 2018, Mr K instructed Allay to make mis-sold PPI claims on his behalf. Claims with Lender R were successful, and Mr K was awarded compensation. And Allay invoiced him for their success fees. Mr K has complained that the majority of the compensation he received from Lender R was offset against existing arrears but Allay still charged their fee on the full amount he’d been awarded. Because of this, he’s been asked to pay more to Allay than he actually received from Lender R. Which he thought was unfair. Allay didn’t agree and said the terms and conditions Mr K agreed to allowed them to do this. So Mr K brought his complaint to the Claims Management Ombudsman (a Financial Ombudsman service) for investigation. Our investigator initially thought Allay hadn’t acted reasonably. She said that, although the terms and conditions covered this eventuality, Allay hadn’t done enough to ask Mr K about any potential arrears he may have. And she didn’t think a term in the Letter of Authority (LOA) was enough, as it didn’t show examples of how fees may be calculated when a refund was offset. So she recommended that Allay should only charge Mr K their fee on the amount he actually received, and not on the amount he was awarded. Mr K agreed with the investigator but Allay didn’t. They said that, in signing their terms Mr K had declared he wasn’t in arrears with Lender R, and that he wasn’t in a debt management plan. They’ve also said that Mr K had the opportunity to read and understand their terms before he instructed them to act for him, and they don’t feel it’s fair for them to be held responsible if he didn’t do this. Allay also provided additional evidence to support why they thought Mr K’s fee was due. Based on this evidence, the investigator changed her view. She said that Allay provided Mr K with their terms and conditions, and he signed to say he’d read these and agreed to them. And the terms made it clear that Allay would still charge their full fee if any compensation was used to offset arrears. So she felt Mr K was aware of the circumstances where Allay would charge a fee, and noted that Mr K had paid Allay’s fees on other successful claims against Lender R. Because of this, she said Allay’s fee was due. Mr K didn’t agree with the investigator’s amended view. And he’s unhappy that Allay didn’t make a claim against his credit card, when PPI was identified; and that Allay were selective with the claims they pursued. So, he’s asked for an ombudsman to make a final decision. Final decision Complaint by: Mr P Knight Referred to as: Mr K Complaint about: Allay Claims Ltd Complaint reference: PNX-3389096-D1J4 Date of decision: 20 November 2020 What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. Having done so, I’ve reached the same overall conclusions as the investigator, and for broadly the same reasons. I can understand this is likely to come as a disappointment to Mr K, but I hope my findings go some way in explaining why I’ve reached this decision. I’ve focused my comments on what I think is relevant. If I haven’t commented on any specific point, it’s because I don’t believe it’s affected what I think is the right outcome. Mr K instructed Allay on 25 October 2018. I’ve seen the LOA he signed on this date and, in signing this, Mr K agreed he’d “read this Letter of Authority and the Allay Claims Ltd. Terms of Engagement (a copy of which is overleaf) and agree to be bound by their contents.” I’ve also seen that the terms that were printed on the back of the LOA, so I’m satisfied Mr K would have received these. The terms were contained on a single page, and the print was not so small it couldn’t easily be read. In explaining their fees, Allay’s terms said “We are entitled to receive 24% (inclusive of VAT where applicable) of redress recovered relating to all accounts with your lenders, no matter if received after the initial settlement, whether any redress was received in whole or part by way of loans/arrears reduction, refund of premiums, and/or in cash. This fee is calculated before any applicable tax payment/deduction for which you are liable.” As part of their process, Allay carried out a PPI check. They contacted Lender R, who said Mr K had been sold PPI on five loan accounts. I’ve seen the response from Lender R and this makes no reference to Mr K having been sold PPI on a credit card. So I’m satisfied that Allay didn’t tell Mr K about the potential credit card claim because they were unaware there was any potential claim. And, because Allay work on a no win no fee basis, so only get paid on successful claims; it wouldn’t be in their interests to not pursue a potential claim. So I don’t agree with Mr K that Allay were selective with the claims they told Mr K about and pursued. Allay told Mr K about the PPI Lender R had advised them of and asked him to provide some further information so they could make the claims in his behalf. Mr K did so on 14 November 2018, and in doing so again agreed to accept Allay’s terms. Allay then prepared and submitted the claims to Lender R. On 3 December 2018, Lender R told Mr K that his claim against one of the loans had been successful, and that he’d been awarded £798.36 compensation before tax. I’m not aware exactly when Lender R told Allay about this success; but Allay invoiced Mr K for their success fee on 12 February 2019. Mr R subsequently paid this fee. On 28 February 2019, Lender R told Mr K that the claims against the other four loans had also been successful, and that he’d been awarded £9,759.79 compensation before tax. But Lender R didn’t tell Allay about this success until 24 June 2019, at which point they invoiced Mr K for their success fee of £2,342.35. This fee remains unpaid. I’ve not seen a full copy of Lender R’s letter of 28 February 2019, but the contents aren’t disputed. Lender R offset the compensation against outstanding historic arrears Mr K had on an old credit card account – the credit card Lender R hadn’t told Allay about when they did the PPI check. As I understand it Mr K made a separate PPI claim against this credit card, without Allay’s assistance. This claim was successful in August 2019, but the compensation awarded was also used to offset the historic arrears. The fee Allay charged Mr K is in line with the agreement he signed. This allowed them to charge their fees even if the compensation had been used to offset arrears. And Allay charged a percentage success fee, not a fee based upon the amount of work they’d done. Which means any work done on any unsuccessful claims would be done for free. But, when a claim was successful, Allay’s fee may be more or less than the value of the work they actually did. This is the risk taken by all parties in this type of agreement. Just because Allay’s fee is higher than the value of the work they’ve done for Mr K doesn’t make their fee unjustified. So, given the above, I’m satisfied that Allay have acted reasonably by charging their success fee. And I won’t be asking them to reduce or waive this. But, given the circumstances, Mr K didn’t receive the compensation with which to pay Allay’s fee. So I’d expect Allay to work with Mr K to reach a mutually agreeable payment plan for the outstanding fees. My final decision For the reasons explained above I don’t uphold Mr K’s complaint about Allay Claims Ltd. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr K to accept or reject my decision before 18 December 2020.

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