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CMCs need to be brought into line

I am writing in response to the front page story about claims management companies (CMC ‘harassment’ is clear-cut case for IFA long-stop, FA 15 August)

I am not picking out any one claims management entity, but sadly the whole claims industry needs to be tidied dramatically. We chose to be separately regulated by the Claims Management Regulator so we can assist people with problems when they may arise, as well as the FCA, incidentally.

What is so sad is that the Financial Services and Markets Act 2000 created the Financial Ombudsman Service, a free service for customers of financial advisers and institutions. There is a strict regulatory regime of complaints handling which firms must follow or they could face fines from the regulator – as has happened.

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Claims management firms are meant to follow their own regulatory processes, but some in-depth research suggests they are rather far from this. Sadly it appears the average firm is falling well short of these requirements and, as a consequence, could be misconstrued as being rather misguided.

While not singling out any firm, so much of the advertisements and website material concentrates upon apparent ethical standards and practices, yet the major financial loss of compensation to eligible complaints is not mentioned at all. Of course there will be some rare instances when complainants need professional help, despite the Fos being there to offer that.

However blanket suggesting that everyone is likely to secure a more successful outcome by passing things to a claims management firm is wrong, if that is what is happening, and something needs to be done about it. Perhaps they should be compensating customers if they have not been honest about that.

Philip Milton

Chartered Financial Planner

Philip J Milton & Company