Opinion  

Levy rises while claims companies cash in

Name and address supplied

I am writing to highlight a growing problem which is taking FSCS levy monies away from its intended recipient. Judge for yourself.

Adviser company places lots of clients’ monies in worthless investments via a Sipp.

FCA eventually catches up with said company forcing it into liquidation.

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Just prior to liquidation, adviser informs client that he has lost his investment, however passes client on to a claims management company which can ‘help’ recover lost monies.

Claims company sends client a pre-populated form to complete and return along with a contract confirming deduction of large success fee.

As compensation is only £50,000 limit per failed company, CMC offers to chase further linked companies for a separate fee.

Case is passed to a claims handler appointed by Fos (so very little work to do for CMC once form has been posted).

Client eventually gets his £50,000 compensation minus anything up to £10,000.

Hundreds of thousands of pounds are being diverted away from deserving clients in a way that is immoral if not necessarily illegal.

I have contacted virtually every major ‘body’ possible to report, with very little interest.

Meanwhile, more honest advisers continue to be persecuted and asked for more monies to top up the levy, while it is being siphoned off by companies, most often than not run by ex-advisers.

Name and address supplied