IFA tells CMC to pay £3,861 costs for ‘groundless complaint’

An IFA has written to a claims management firm demanding it pays his costs and compensation for time spent handling a baseless claim.

Neil Liversidge, managing director of West Riding Personal Financial Solutions and Association of Professional Financial Advisers’ council member, wrote to Money Claims (UK) Ltd, demanding a total payment of £3,861.25 for his time wasted investigating what he deems to be a spurious complaint.

This figure includes £1,000 compensation for disrupting his annual holiday.

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The complaint stems from August 2012 when Money Claims (UK) Ltd wrote to Mr Liversidge alleging he mis-sold a mortgage to an elderly customer in 2006.

Money Claims (UK) Ltd alleged that the mortgage was unsuitable and the adviser did not explain that a separate investment vehicle would be needed to repay the interest-only mortgage at the end of term. However, FTAdviser has seen documentation that supports Mr Liversidge’s claim that this is not the case.

At the time of the complaint, Mr Liversidge was on holiday and had the entire file scanned and sent to him at his holiday location, which took three and a half hours of his PA’s time.

Upon his return to the UK, he interviewed the adviser who had executed the mortgage and also re-examined the file, in all exceeding seven hours of his time. Mr Liversidge wrote a final letter rebutting the claim and advising the CMC of the right to appeal via the Financial Ombudsman Service.

Money Claims (UK) Ltd did not appeal and now Mr Liversidge has written to the CMC, demanding total costs for time wasted and compensation and also copies of all documents relating to this claim including how the claim originated and who initiated the contact between Money Claims (UK) Ltd and Mr Liversidge’s client.

In the letter, seen by FTAdviser, Mr Liversidge also added that he would be open to mediation and would consider any other system of alternative dispute resolution to avoid the need for this to be resolved by the courts. Mr Liversidge added that if he does not hear from the firm within 28 days, he will commence court action.

Today the Ministry of Justice proposed tougher rules for CMCs to prevent them from bombarding financial services providers with spurious claims.

On its website, Money Claims says it looks at payment protection insurance claims and mortgage claims.

It says: “To find out whether you’re due compensation, check when you took out your mortgage or re-mortgage. If it was during or after November 2004, then it’s possible you were mis-sold the product by your advisor or lender - in which case we can investigate further on your behalf.”

Last month, Alan Lakey, partner at Highclere Financial Services, took CMC Aims Reclaim to a small claims court when the CMC refused to pay an invoice for the time Mr Lakey spent handling a spurious claims.