I have come under fire from some “claims management companies” as a result of remarks I made last week.
Last week I wrote about how with the Financial Services Compensation Scheme and Financial Ombudsman Service both raising their eyebrows about some Sipp recommendations, ambulance chasers were already circling.
I pointed out claims management firms are swift to tap into the next source of fast flowing cash into their pockets.
Type pension transfer scandal into Google and the first four results you get are all advertisements promising “no win no fee” to make a claim against the adviser who recommended you ditch your old occupational scheme.
One claims management company claimed my labeling his type of firm "ambulance chasers" was somewhat off the mark.
He argued firms like his don't chase ambulances but they do get a lot of poorly patients knocking on their door.
He said: “We do fight very hard for our clients. And we have a very close and rewarding relationship with many financial advisers.”
So, here is my response to that criticism…
If you search for Financial Ombudsman Service decisions featuring a “claims management company” published online between 1 December 2016 and 26 January 2017 you have 18 pages of results – 349 decisions – to read through.
Of those 349 decisions, just 75 complaints made by a claims management company were upheld.
So, less than a quarter of complaints ambulance chasers (yes, I still believe that is what the bulk of these companies are) made on behalf of people were actually deemed legitimate and worthy of compensation by the Financial Ombudsman Service.
Despite my critic's claim that people are knocking on claims management companies doors, my experience with this type of business is they are usually calling you at home, texting your phone and polluting television advertising breaks with pledges of “No win, no fee”.
Despite this cold calling, the average man on the street would think, if a company was interested in their complaint, then surely they think it is a worthwhile one worthy of compensation.
While my critic says he fights hard for clients – and I am sure some of these companies do – the vast majority are just filling in paperwork in the hope of making a quick buck.
It is easy to complain to the Financial Ombudsman Service and if a complaint is legitimate and totally justified then people really don’t need these ambulance chasers to fill in a form for them.
The ombudsman’s statistics show if you refer your complaint to them yourself, you’re just as likely to win compensation as if you were to pay a claims management company to do it for you.
Ambulance chasers don’t boost the chances of you getting compensation awarded to you – that is a message that should be shouted from the rooftops.