Does PPI Letter of Authority expire?

[justwonder]

I have an issue with a Claims Management Company (CMC) seeking compensation for a PPI claim. Just require some clarity as to whether they are actually entitled to the fees. Please advise which forum I should use.

[Amethyst]

Here is fine, I'll move your thread to the CMC forum for you

[Amethyst]

How long ago are we talking ? Most banks/lenders require a new letter of authority every six months or so. ( which is why people with certain CMC are drowning in new forms to complete all the time ). Anyway if you tell us what the situation is we should be able to give you a bit of guidance dealing with it.

[Guest]

It depends on a number of things.

Strictly speaking, 6 months from the date you've signed it. But that only applies to businesses operating under the BBA principles:

https://www.bba.org.uk/policy/retail...pi-complaints/

There's a list of them here and who's subscribed to them. Other businesses have their own rules.

The 2nd thing is that even though a LOA lasts for 6 months, it can also be valid for the duration of a claim, unless you tell the business not to accept it any longer. E.g. if you submitted a claim in January this year and it's still not resolved, the LOA is still valid. Once a claim is resolved, its then valid for a further 6 months. That's in the BBA principles too.

But, typically, the LOA doesn't interfere with any other parts of an agreement with a CMC. I.e. if you tell the Bank to stop talking to a CMC by withdrawing its authority, you've still got a contract with the CMC.

What's the actual problem you're having?

Please remember the advice you get here depends on the information you give.

[justwonder]

This is my situation:
I was contacted about 2 years ago by a popular Claims Management Company (CMC) about PPI. After taking my details they sent a Letter of Authority (LOA) for the Lenders I told them I had loans and credit cards with to act on my behalf to do a Free PPI Check.

Two lenders came back saying PPI was found on a couple loans and the CMC sent further LOAs and Lender Questionnaires (LQs) requesting more information to make a claim. I signed these and returned to CMC. None of these PPI claims were upheld.

Two years on, one of the lenders sent me a letter (and cc’d the CMC) to say there was an error and they have found PPI on a credit card that I had with them and asked me to fill out a form to provide more details.

Soon after this, the CMC also sent me a LOA and LQ relating to this credit card. I was able to return the CMC’s LOA or LQ. The PPI deadline was approaching and on the 28/08/2019 the CMC sent me an email saying that my claim was “With Me – No claim submitted” and that they couldn’t take any information but that I could still contact my lender directly before the deadline on 29/08/2019.

The email gave the impression that they weren’t able to assist me so I didn't bother returning their LOA and LQ but completed the Lender’s questionnaire myself online.

The claim was upheld and a payout was made directly to me. The lender sent a letter to me but also cc’d the CMC. The CMC called me (very aggressively) a few days after and said that they (the CMC) had made a payment to me and that their fees were now due. When I inquired as to which account they made the payment to, they weren’t able to say and asked me to check my account and they’d call back in a few days.

On that call the CMC also said they sent me an invoice for payment by email, but that was not true.

I contacted the Lender to ask for a copy of whatever LOA they would have received from the CMC. The Lender told me that they do not have that information and that all they have on record is that the CMC did a PPI check on my behalf two years ago and because of this initial check they were obliged to inform the CMC about the new discovery.

The CMC then sends me a letter requesting payment stating that a copy of the Offer Letter was enclosed, but indeed it wasn’t in the envelope. They also stated that “they acted on my original LOA and that no further information was required by the Lender” to uphold the claim.

I contacted the CMC and asked for a copies of “the original LOA” and the Offer Letter from the lender which they eventually sent separately a few days apart calling again demanding payment before the second letter arrived.

When the copy of the LOA did arrive, this was the first LOA they asked me to sign 2 years ago giving them permission to contact the Lender about PPI (which they had widely advertised as being a FREE check). This one had no account numbers, etc. just the lender's name. The CMC’s Terms state that if they identify PPI on a policy or account they will send a LQ and they will not process the claim(s) until they receive my instructions.


My questions:
1) Is the CMC still entitled to fees?

2) Were they indeed able to use my “original” LOA that was signed over 2 years ago? And if so, why did they send another LOA when the PPI was identified by the Lender?

3) And what about that email they sent saying No Claim was submitted? Does this have any bearing on the situation?

[Guest]

Thanks for such a detailed response. It's difficult to answer your questions with any certainty because there's still another side to the story, but I hope this helps

To answer your questions:

1) depending on how your agreement runs with the CMC, yes. The CMC can't be blamed cause the bank made a mistake in the first place. You might find it helpful reading the Claims Management Ombudsman's decisions on similar cases.

2) before the deadline, banks operated a 'auto convert' process. Meaning you only had to ask if you had PPI and if you did, they'd log a complaint for you and deal with the rest later. The same process applied to CMCs.

Around this time last year, a huge bank also announced it had given 'inaccurate' outcomes to a 'small' number of PPI info requests, so in reviewing those, they'd treated them as fresh enquiries, so the bank probably used the CMCs old LOA as you've said when you called them. If I'm right, the bank in question will be a bank who's current former bosses are on trial for fraud.

3) quite possibly, but then this depends on the info the bank gave the CMC. I'd also say this will have been a 'auto convert' claim, meaning the questionnaire is immaterial and because the bank was relying on the old LOA it doesn't matter if you hadn't sent it back. That makes me think what you saw online was poor systems management on their part, but nothing more.

I'd also say, CMCs won't be privy to specific information about how & where money is paid to. The banks don't like giving that out, so they'll normally say a payment is done via transfer or cheque. I wouldn't say that's cause to be concerned. It's just confusing.

The best way for you to get clarity on the situation is probably to complain and if you're not happy, go to the CMO (FOS). Don't waste your time doing a DSAR, you'll only end up with loads of information that doesn't really matter or make any sense. Unless of course you want to do that.

I'd also say if you want the CMC to leave you alone, pay them 'under duress' and then if a complaint is decided in your favour, you'll get your money back. That should hopefully save you some stress.

Hope this helps.

[Guest]

Just to add, what do the terms say about the free check?


It sounds like you have them two sets of LOAs

1 to check and another to pursue a claim? If you didn't sign an LOA to pursue the original claims, you'll probably find you stand a good chance of getting their fee waived.

If you signed the 2nd one, much less of a, chance. The CMC will operate on the presumption you would have pursued the claim at the time if they'd been given the correct information by the bank.

[justwonder]

Thank you for your reply. It has helped quite a lot. Just didn't want to be stiffed by the bank (for PPI) and then again by the CMC but I see the points you've raised looking at it from their perspective as well.

Regarding the Free check, some of the definitions in their terms said:
"Free PPI Check" means [the CMC] will endeavour to identify whether PPI existed on products/accounts provided by the Company for free.

"Claims Services" means preparing, submitting and negotiating Your Claim(s) to the Company once we have located PPI.

"Instruction" means Your instruction to us to commence the Claims Services contained within these Terms. Your Instruction can be given once PPI has been located. You can provide Your instructions in one of two ways; either by returning the Lender Questionnaire to [the CMC] or by completing the Lender Questionnaire over the telephone with [the CMC].

Yes, I signed a 2nd LOA when PPI was discovered on 2 loans with the same Lender so guess this would have applied to the new credit card discovery too.

Thanks again. I'm leaning to the side of your suggestion to pay them then make a complaint if I'm not happy.

[EXC]

Thanks again. I'm leaning to the side of your suggestion to pay them then make a complaint if I'm not happy.

What is the rate of commission that they are charging you?

For contracts entered into since July 2018 CMC's fees were capped at 20% + VAT. If they are charging you at a higher (older) rate you might want to offer them 20% as being fair & reasonable under the circumstances.

[justwonder]

They are charging 30%+VAT. But if they are saying they are using my "original" LOA that was signed back in 2017. Can I still make a fair and reasonable offer?

[EXC]

They are charging 30%+VAT. But if they are saying they are using my "original" LOA that was signed back in 2017. Can I still make a fair and reasonable offer?

I don't see why you can't ask.

Two years on, one of the lenders sent me a letter (and cc’d the CMC) to say there was an error and they have found PPI on a credit card that I had with them and asked me to fill out a form to provide more details.

To be honest if the 'free PPI check' failed to identify that there was any PPI in the first instance (regardless of whose fault it was) and that it was you that filled out the form and as such you that initiated the claim, I'd be tempted to offer them 10% as a gesture of good will.

They can only say no.

[justwonder]

To be honest if the 'free PPI check' failed to identify that there was any PPI in the first instance (regardless of whose fault it was) and that it was you that filled out the form and as such you that initiated the claim, I'd be tempted to offer them 10% as a gesture of good will.

They can only say no.

Hmm... good point. Thanks. May just give that a try!

[justwonder]

Just wanted to update to say “Thank You” to LegalBeagles and to update on the outcome of my situation.

I wrote a letter to the CMC asking for clarity on this issue to support that they actually acted with my permission to pursue the claim, given the issues with the Letters of Authority and Letter Questionnaire.

After waiting a few days I didn’t hear from them but had got an email of a payment deadline. I decided to pay 50% of the fee and sent another letter stating that I believed this was fair and reasonable.

The following day I received a letter from them stating they had raised a complaint with their Complaints Department (based on my first letter) and that the matter will be investigated.

A few days ago I got a response from the compliance assessor stating that indeed the CMC did not submit a claim to the Lender regarding that credit card after the initial notification of no PPI but that the Lender had automatically re-investigated on my behalf and as such the CMC had incorrectly invoiced for a fee. They apologised, refunded what I had paid and waived the remainder from my account.

Thanks again to all who advised on this matter as this helped me to decide what to do. I’m very pleased with the outcome.