The managing director of West Riding Personal Financial Solutions and Association of Professional Financial Advisers’ council member, wrote to Money Claims (UK) demanding £3861.25 for time wasted investigating what he feels was a spurious complaint.
I would judge that 95 per cent of the population is heartily sick of these companies.
As consumers we are badgered with texts and phone calls encouraging us to claim for accidents and incidents that may never have happened.
CMCs have been instrumental in driving up motor insurance premiums, regularly strip individuals of a third of genuine compensation that should reach their pockets and cause unwanted headaches with spurious claims.
Many appear to have adopted a scatter gun approach: get a consumer to complain even if there is nothing to complain about, send off a letter and see if you get a result.
I do not know what happened in this particular case but banks have told me they regularly receive claims for payment protection insurance mis-selling from people who have never been their customers. Without fail these have come through a CMC.
But why should these firms be allowed to behave this way with impunity? If an IFA is forced to waste time investigating a spurious claim then the IFA should have comeback.
This is entirely a different matter from a consumer who feels they have been badly treated (even if they are mistaken) and takes a normal complaint route.
And before any of you jump on my back, I can tell that I have never – no, not once – encouraged any reader to use a CMC.
I believe the Fos route provides the fairest and best method of pursuing the vast majority of complaints.
Truth be told, of course, the CMC industry has only grown to these proportions because of the appalling behaviour of some sectors of the financial industry, in particular banking.
The CMC industry has only grown because of the appalling behaviour of some sectors of the financial industryIt was not so much that they engaged in mass mis-selling. It was that they then made it so damned difficult for people to make a mis-selling claim that fuelled the growth of this industry.
The executives who decided it would be a good strategy to fob off legitimate complaints bear direct responsibility for fostering the growth of CMCs.
So perhaps Mr Liversidge should also send a bill to the chief executives of the big five banks while he is at it.
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Demand for equity release
Will 2014 be a boom year for equity release? All the signs are there.
House prices are increasing at quite a pace.
Figures published by the Treasury show independent economic forecasters predict, on average, 7 per cent growth for next year.
Meanwhile Bank of England governor Mark Carney has indicated that interest rates may not rise even if unemployment dips below 7 per cent by the end of next year. Current forecasts suggest it may be around 7.1 per cent by then.
A new equity release provider, Pure Retirement, will enter the market in January and there is certainly room for more competition.
The amount of money released in the first six months of this year was £473m – a 12 per cent year-on-year increase – according to the Equity Release Council.
The desire and the market conditions are there. Now we need good products and good advice to meet that demand.
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Obstacles for pension advice
I read a survey last week from Close Brothers suggesting that 17 per cent of small business owners had no income protection and 41 per cent had no pension.
First I find that 17 per cent figure astonishingly low. Do 83 per cent of small business owners really have IP?
If so, give yourselves a pat on the back, you have clearly been working very hard.
The pension figure looks more reliable, if disappointing.
It makes me wonder why financial advisers, who often come from small business roots or still run a small business, find it so hard to communicate the need for a pension to other small business owners.
I suspect there are two barriers. The first is that the owner has other financial priorities right now. The second is that they hope their business will be their pension.
The problem is that, based on recent reports, it only takes RBS or Lloyds to decide that business is ripe for some profit for the whole thing to be pulled from under them.
It is the classic mistake of putting all your eggs in one basket. And that is why you must keep ploughing away.
Tony Hazell writes for the Daily Mail’s Money Mail Section. He can be contacted at t.hazell@gmail.com
