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One to watch as this maybe the next rip off
One claims company says it is pursuing solar power firms which have gone out of business. Photograph: Alamy
The heading on a national newspaper advert from a claims management company (CMC) – "Mis-sold solar water heating?" – is the latest move by an industry of more than 3,000 claims handling firms looking for the next new thing after hoovering up huge profits from payment protection insurance (PPI) mis-selling.
The ad, from Cheshire-based Consumer Reclaim, continues: "If you think you've been sold a Solar Hot Water Heating System by the exaggeration of its benefits, you could be entitled to claim back the full cost."
Readers will remember that many high-selling-pressure firms were named and shamed here four or so years back for claiming far higher benefits from hot-water panels on a roof than were justified. And they charged consumers, who wanted to be "green", up to three times the fair cost of around £4,500 per installation.
Consumer Reclaim states it is "currently handling claims" against a number of companies, including Smart Energy (UK), Ultimate Energy, Simplee Solar, Solar Direct UK, Solar Home Energy, Solsave and Solarsol UK. They all sold systems, and have now gone bust.
Guardian Money asked Consumer Reclaim, which is "regulated by the Ministry of Justice in respect of claims management activities" (registration number CRM23523), how anyone could sue a company that was dissolved or in liquidation and so has no funds, however good a case there might be for a payback for inappropriate selling.
It has not responded to our inquries. But taking the "30-second claim test" on its website – it actually takes five seconds – showed that potential claimants need to have paid via a loan, probably with a credit card. Those who paid cash are told they have no case. Consumer Reclaim believes it can take action, on a "no-win, no-fee" basis, against banks and other lenders under Section 75 of the Consumer Credit Act, the legal framework for compensation if a holiday or other firm goes bust and you lose £100 or more.
The large credit card companies we contacted say they have so far not seen or heard of any claims, although they concede that some in the credit industry may have. But they say Section 75 is more about a failure to deliver rather than over-pricing. One bank that did not wish to be quoted said: "If we paid for all exaggerated prices, we would probably end up giving nearly everyone who ever had a home improvement their money back."
The Ministry of Justice says claims handlers are generally regulated either for personal injury or financial product mis-selling work. There is no suggestion that credit card and other loan companies mis-sold solar panel products.
The MoJ says firms can use their registration on adverts even if the activity promoted is not one covered by the registration.
Consumer Reclaim is part of Consumer Reclaim Ltd, whose sole director is 51-year-old Roger Anthony Pritchard. According to Companies House records, Consumer Reclaim Ltd has failed to send in annual returns due on 12 May and is subject to a "proposal to strike off". This could cause difficulties for anyone who has a contract with them.
Guardian Money found one other company offering redress for solar panel purchasers – Assist Reclaim – with a similar website. It has one director, again a Roger Anthony Pritchard, of Hale, Cheshire. In October 2006, the Financial Services Authority issued a notice against Stockport-based First Legal Services, where Pritchard was also a director. The watchdog cancelled its permission to deal in FSA-regulated activities. It said: "The FSA is not satisfied that you are a fit and proper person, having regard to all the circumstances, including the need to ensure that your business is conducted soundly and properly." First Legal Services went into compulsory liquidation in 2009 after the Official Receiver intervened.
Although there are 3,000 claims companies, a freedom of information request shows the MoJ has just 58 staff to manage claims companies, mainly agency or contract workers, an average of one person for each 52 firms.
In the year to 31 March, 409 claims companies – about one in eight – were warned, suspended or had their registration cancelled, according to the MoJ annual report this month .
Head of claims management regulation Kevin Rousell said: "The mass mis-selling of payment protection insurance has seen a surge in the number of companies operating in the financial claims management sector. Poor practice is rife among some claims management companies, which are falling over each other to get claimants' business. To help tackle this we have set up a specialist team to root out the poor practices used by some companies presenting claims for mis-sold PPI. Our investigators are using effective enforcement to stop bad practice and improve the industry once and for all."
He added: "Other on-going tasks include working with regulators and industry bodies to clamp down on unsolicited text messaging, identifying businesses that take upfront fees and misleading marketing."
Unsolicited texts sent to me include "We have been trying to contact you regarding your accident, we now have details of how much you are due." Although the firm is unidentified, there was no attempt to contact me – and I have had no accident (other than bashing my thumb with a hammer). Another said: "There is £2,351.23 waiting in your name for the mis-selling of PPI on your loans and credit cards. To get this ASAP, reply PPi [sic] to this message NOW." As someone who campaigned against PPI in these pages, I can confidently say I have never taken it out.
Hertfordshire-based independent financial adviser (IFA) Alan Lakey of Highclere Financial Services is glad to hear that the MoJ is getting tougher with PPI claims, but wishes the new zeal was extended to other financial claims.
"I don't want people to be mis-sold – the bad reputation affects IFAs who are innocent," he says. "But in common with many other small advice firms, I've had nonsense letters from claims managers on behalf of clients who do not even know they are complaining. Some have been hoodwinked into giving a claims manager details of their IFA. The CMC then lists everything including the kitchen sink against me. I've been accused of mis-selling an Isa when it was a pension, and vice versa. I write back – this costs time and money – to say they can't accuse me of mis-selling or not advising properly or not discussing relative risk because they don't know.
"They then escalate it to the Financial Ombudsman Service, which currently costs me £500 a case after the first three a year (due to go up to 25 soon) but nothing for them, even though they can collect up to 30% of any compensation. I also have more expenses in dealing with the case in detail. I know of firms including big life companies would rather pay up £1,000 to £3,000 just to get rid of the aggravation; in some cases their professional liability insurers tell them to do this as it's cheaper. It's true. These phoney claims cost me around £2,500 on average if you count my own time."
The ombudsman service says it has seen some inquiries about solar panels but has yet to give a formal ruling.
It adds: "Consumers can come to the ombudsman if they are unhappy with the results of a failed section 75 claim in relation to this subject. As we discussed, it's not black and white (it rarely is) but that's where we step in anyway.
"Consumers don't need to use claims managers to bring a complaint about section 75 – or any financial product. We will ask the consumer to explain what has gone wrong in their own words. You don't need to be a financial expert to use the service."
Case study: 'What PPI?'
My son, Oliver Mernick-Levene, was approached by someone gathering details for Ministry of Justice-regulated Challengeyour.com.
"She asked if I had claimed for payment protection insurance mis-selling. I told her I never had, that I paid off my credit card each month and was a penniless student when these policies were sold and never used my card for more than buying low-value stuff online. But this didn't stop her, so I gave my details because I was fed up with her."
A week later, a letter arrived which, referring to an old credit card, said: "I write in relation to the above claim we are making on your behalf, and to confirm that we have all the necessary information to advance your case to one of our claims handlers."
Oliver says: "I can't have been mis-sold PPI because I never bought it. I told them this, but it did not seem to stop them. They have sent me a long form to fill in which assumes I had PPI cover. It's going into the recycle bin."
Counting the cost
One in three claims for PPI mis-selling is false and three-quarters of false claims come from fee-hungry claims management companies (CMCs), according to Nationwide building society. The fake claims are costing the society millions of pounds in wasted processing fees. Nationwide says about 40% of the total cost it faces for PPI compensation goes on administration, which must inevitably be passed on to customers.
Lloyds Banking Group said earlier this summer that of the claims submitted by CMCs, 25% were from people who didn't even have a Lloyds product. "We have to stop this," chief executive António Horta-Osório said. "It's fraud."
Given the NatWest service meltdown, Barclays Libor scandal and HSBC's drug-money laundering, sympathy for bankers is in short supply. But as they have been besieged by PPI claims, many of them on the flimsiest grounds, the banks are now in a rare alliance with consumer groups such as Which? who are furious at how CMCs have exploited the PPI scandal.
The claims companies typically take a 25% cut of any 'winnings' from a PPI claim. Exact figures are not available, but critics estimate that at least £1bn, and maybe up to £2bn, of the sums paid out on PPI will be pocketed by the CMCs and the legal firms behind them.
In a mystery shopping exercise, Which? alleged that every one of the 17 companies it investigated were in breach of regulations. Many of the companies repeatedly told Which? investigators they would obtain more compensation than if the victim tried doing it themselves. "Not only is this likely to be untrue, it's in clear breach of the rules," said Which?
If you have been mis-sold PPI it is relatively easy to make a claim yourself. If you were not told that PPI was optional or do not believe it was made clear that you could not have made a claim, you may have grounds to get your money back.
http://www.guardian.co.uk/money/2012...s-solar-panels
One claims company says it is pursuing solar power firms which have gone out of business. Photograph: AlamyThe heading on a national newspaper advert from a claims management company (CMC) – "Mis-sold solar water heating?" – is the latest move by an industry of more than 3,000 claims handling firms looking for the next new thing after hoovering up huge profits from payment protection insurance (PPI) mis-selling.
The ad, from Cheshire-based Consumer Reclaim, continues: "If you think you've been sold a Solar Hot Water Heating System by the exaggeration of its benefits, you could be entitled to claim back the full cost."
Readers will remember that many high-selling-pressure firms were named and shamed here four or so years back for claiming far higher benefits from hot-water panels on a roof than were justified. And they charged consumers, who wanted to be "green", up to three times the fair cost of around £4,500 per installation.
Consumer Reclaim states it is "currently handling claims" against a number of companies, including Smart Energy (UK), Ultimate Energy, Simplee Solar, Solar Direct UK, Solar Home Energy, Solsave and Solarsol UK. They all sold systems, and have now gone bust.
Guardian Money asked Consumer Reclaim, which is "regulated by the Ministry of Justice in respect of claims management activities" (registration number CRM23523), how anyone could sue a company that was dissolved or in liquidation and so has no funds, however good a case there might be for a payback for inappropriate selling.
It has not responded to our inquries. But taking the "30-second claim test" on its website – it actually takes five seconds – showed that potential claimants need to have paid via a loan, probably with a credit card. Those who paid cash are told they have no case. Consumer Reclaim believes it can take action, on a "no-win, no-fee" basis, against banks and other lenders under Section 75 of the Consumer Credit Act, the legal framework for compensation if a holiday or other firm goes bust and you lose £100 or more.
The large credit card companies we contacted say they have so far not seen or heard of any claims, although they concede that some in the credit industry may have. But they say Section 75 is more about a failure to deliver rather than over-pricing. One bank that did not wish to be quoted said: "If we paid for all exaggerated prices, we would probably end up giving nearly everyone who ever had a home improvement their money back."
The Ministry of Justice says claims handlers are generally regulated either for personal injury or financial product mis-selling work. There is no suggestion that credit card and other loan companies mis-sold solar panel products.
The MoJ says firms can use their registration on adverts even if the activity promoted is not one covered by the registration.
Consumer Reclaim is part of Consumer Reclaim Ltd, whose sole director is 51-year-old Roger Anthony Pritchard. According to Companies House records, Consumer Reclaim Ltd has failed to send in annual returns due on 12 May and is subject to a "proposal to strike off". This could cause difficulties for anyone who has a contract with them.
Guardian Money found one other company offering redress for solar panel purchasers – Assist Reclaim – with a similar website. It has one director, again a Roger Anthony Pritchard, of Hale, Cheshire. In October 2006, the Financial Services Authority issued a notice against Stockport-based First Legal Services, where Pritchard was also a director. The watchdog cancelled its permission to deal in FSA-regulated activities. It said: "The FSA is not satisfied that you are a fit and proper person, having regard to all the circumstances, including the need to ensure that your business is conducted soundly and properly." First Legal Services went into compulsory liquidation in 2009 after the Official Receiver intervened.
Although there are 3,000 claims companies, a freedom of information request shows the MoJ has just 58 staff to manage claims companies, mainly agency or contract workers, an average of one person for each 52 firms.
In the year to 31 March, 409 claims companies – about one in eight – were warned, suspended or had their registration cancelled, according to the MoJ annual report this month .
Head of claims management regulation Kevin Rousell said: "The mass mis-selling of payment protection insurance has seen a surge in the number of companies operating in the financial claims management sector. Poor practice is rife among some claims management companies, which are falling over each other to get claimants' business. To help tackle this we have set up a specialist team to root out the poor practices used by some companies presenting claims for mis-sold PPI. Our investigators are using effective enforcement to stop bad practice and improve the industry once and for all."
He added: "Other on-going tasks include working with regulators and industry bodies to clamp down on unsolicited text messaging, identifying businesses that take upfront fees and misleading marketing."
Unsolicited texts sent to me include "We have been trying to contact you regarding your accident, we now have details of how much you are due." Although the firm is unidentified, there was no attempt to contact me – and I have had no accident (other than bashing my thumb with a hammer). Another said: "There is £2,351.23 waiting in your name for the mis-selling of PPI on your loans and credit cards. To get this ASAP, reply PPi [sic] to this message NOW." As someone who campaigned against PPI in these pages, I can confidently say I have never taken it out.
Hertfordshire-based independent financial adviser (IFA) Alan Lakey of Highclere Financial Services is glad to hear that the MoJ is getting tougher with PPI claims, but wishes the new zeal was extended to other financial claims.
"I don't want people to be mis-sold – the bad reputation affects IFAs who are innocent," he says. "But in common with many other small advice firms, I've had nonsense letters from claims managers on behalf of clients who do not even know they are complaining. Some have been hoodwinked into giving a claims manager details of their IFA. The CMC then lists everything including the kitchen sink against me. I've been accused of mis-selling an Isa when it was a pension, and vice versa. I write back – this costs time and money – to say they can't accuse me of mis-selling or not advising properly or not discussing relative risk because they don't know.
"They then escalate it to the Financial Ombudsman Service, which currently costs me £500 a case after the first three a year (due to go up to 25 soon) but nothing for them, even though they can collect up to 30% of any compensation. I also have more expenses in dealing with the case in detail. I know of firms including big life companies would rather pay up £1,000 to £3,000 just to get rid of the aggravation; in some cases their professional liability insurers tell them to do this as it's cheaper. It's true. These phoney claims cost me around £2,500 on average if you count my own time."
The ombudsman service says it has seen some inquiries about solar panels but has yet to give a formal ruling.
It adds: "Consumers can come to the ombudsman if they are unhappy with the results of a failed section 75 claim in relation to this subject. As we discussed, it's not black and white (it rarely is) but that's where we step in anyway.
"Consumers don't need to use claims managers to bring a complaint about section 75 – or any financial product. We will ask the consumer to explain what has gone wrong in their own words. You don't need to be a financial expert to use the service."
Case study: 'What PPI?'
My son, Oliver Mernick-Levene, was approached by someone gathering details for Ministry of Justice-regulated Challengeyour.com.
"She asked if I had claimed for payment protection insurance mis-selling. I told her I never had, that I paid off my credit card each month and was a penniless student when these policies were sold and never used my card for more than buying low-value stuff online. But this didn't stop her, so I gave my details because I was fed up with her."
A week later, a letter arrived which, referring to an old credit card, said: "I write in relation to the above claim we are making on your behalf, and to confirm that we have all the necessary information to advance your case to one of our claims handlers."
Oliver says: "I can't have been mis-sold PPI because I never bought it. I told them this, but it did not seem to stop them. They have sent me a long form to fill in which assumes I had PPI cover. It's going into the recycle bin."
Counting the cost
One in three claims for PPI mis-selling is false and three-quarters of false claims come from fee-hungry claims management companies (CMCs), according to Nationwide building society. The fake claims are costing the society millions of pounds in wasted processing fees. Nationwide says about 40% of the total cost it faces for PPI compensation goes on administration, which must inevitably be passed on to customers.
Lloyds Banking Group said earlier this summer that of the claims submitted by CMCs, 25% were from people who didn't even have a Lloyds product. "We have to stop this," chief executive António Horta-Osório said. "It's fraud."
Given the NatWest service meltdown, Barclays Libor scandal and HSBC's drug-money laundering, sympathy for bankers is in short supply. But as they have been besieged by PPI claims, many of them on the flimsiest grounds, the banks are now in a rare alliance with consumer groups such as Which? who are furious at how CMCs have exploited the PPI scandal.
The claims companies typically take a 25% cut of any 'winnings' from a PPI claim. Exact figures are not available, but critics estimate that at least £1bn, and maybe up to £2bn, of the sums paid out on PPI will be pocketed by the CMCs and the legal firms behind them.
In a mystery shopping exercise, Which? alleged that every one of the 17 companies it investigated were in breach of regulations. Many of the companies repeatedly told Which? investigators they would obtain more compensation than if the victim tried doing it themselves. "Not only is this likely to be untrue, it's in clear breach of the rules," said Which?
If you have been mis-sold PPI it is relatively easy to make a claim yourself. If you were not told that PPI was optional or do not believe it was made clear that you could not have made a claim, you may have grounds to get your money back.
http://www.guardian.co.uk/money/2012...s-solar-panels
