Claims Management Companies
The FLA believes in the right for consumers to have third party representation in any disputes they may have about financial products and services they may have purchased. Claims Management Companies (CMC’s) can provide this kind of representation - but make sure you are dealing with a reputable company.
If consumers have a complaint, or a concern about any product or service they have received from their financial service provider, we recommend that they first speak to their provider to try and resolve their dispute.
Failing this, there are also free services which may be able to help - for example, the Citizens' Advice Bureau (CAB). We also offer an arbitration service for consumers who take out financial services and products with our members.
If the consumer is still unable to resolve their dispute with their provider, as a last resort the Financial Ombudsman Service (FOS) offers a free and independent arbitration service.
Consumers are under no obligation to use a claims management company if they have a complaint with a company.
But if consumers decide to use a CMC we recommend that they take the following steps:
- Check whether the CMC is authorised to represent them. CMC’s are regulated by the Ministry of Justice (MOJ). This can be checked on the MOJ website.
- Beware of misleading advertising. If what they are offering sounds too good to be true, it probably is! For example:
- We can get your loan balance written off - Get previous payments refunded.
- Stop paying. It will not affect your credit rating
- Consumers should be wary of paying CMCs large upfront fees for work.
- Be aware that the MOJ and the Office of Fair Trading (OFT) remain concerned about these and other practices. As a result they have issued a number of ‘consumer alerts’. The MOJ has written to regulated firms to stop poor and illegal practices. For further information go to MOJ’s website.
The FLA runs a Claims Management Committee for its full members. The aim of this forum is to improve the regulatory environment of CMCs and Solicitor firms who act on behalf of customers. High quality third-party representation in the claims arena is likely to reduce consumer detriment in the longer term.