A client has been left to turn to the courts after he failed to receive his pension compensation from Karmen Funding Limited.
The client, known as Mr M, made a complaint to the Financial Ombudsman Service about claims management company Karmen Funding Limited, which took more than £11,000 from him on claim, despite him requesting to cancel his contract.
According to the case history outlined by the Fos, Mr M had instructed Karmen Funding, a claims management company, to assist him with a claim about a mis-sold pension.
He said when he spoke to the firm in July 2020, he was told his case had been passed to a law firm.
When he contacted the law firm, he was told a fee of 36 per cent would apply. Hearing this, Mr M said he gave instruction for his contract with Karmen Funding to be terminated but his request was ignored.
In October 2020, the Financial Services Compensation Scheme awarded Mr M more than £30,000 in compensation for his pension claim.
The payment was made to Karmen Funding and the CMC sent Mr M a cheque after deducting a total of more than £11,000 from the compensation.
He took his complaint against Karmen to the Fos. Ombudsman Anne Muscroft upheld the complaint, stating that the Fos was satisfied Mr M had informed Karmen Funding that he no longer wished it to act on his behalf.
The investigator thought Karmen Funding should have terminated the agreement at that point and applied cancellation charges in line with the agreement, which concluded that the firm was entitled to charge Mr M a maximum of £450.
The Fos recommended the Karmen Funding refund the balance of the funds it had retained and pay Mr M 8 per cent simple interest.
However, Mr M, who is a client of Philip J Milton & Company, has still not received the payment and is being made to turn to the courts to receive it.
The Fos told Philip J Milton & Company, which wrote to it on the client's behalf, that the service is not able to enforce the final decision for Mr M.
In an email to the firm, the Fos said: “Where a business fails to comply with a final decision that has been accepted, the customer can enforce the ombudsman's decision through the courts, as it is legally binding.
"This wouldn’t involve having the merits of the case looked at again, as the customer would be simply asking the courts to enforce the decision.
"There's also the option to sue the business, and this will involve the courts reviewing the merits of the case. We can't give advice on this, we can only let you know the options available.”