BSA Seeks More Control Over CMCs Filing Fake PPI Claims

Rules of conduct
The Association wants the Ministry of Justice to speed up the process of finalization of you conduct rules applicable to claims management companies. In its opinion, the new rules should cover details like charging of upfront fees, cold calling, transparency in pricing, standards relating to service, handling of cases in a professional manner, restrictions on fishing expeditions, and mandatory written contracts between CMCs and its customers. The BSA is not interested in another voluntary industry led code of conduct as suggested by the Claims Standard Council. The BSA has pointed out that firms do not follow the conduct rules imposed by the Ministry of Justice because it happens to be voluntary and there are no penalties attached to violations.

Adrian Coles, the director-general of the Building Societies Association, has pointed out that claims management firms have simply ignored the August 2011 warning issued by the Ministry of Justice. He pointed out that data and statistics indicates that the firms have started using their scattergun approach more frequently to improve their profits. He opined that the latest warning issued in June would not have a deterrent effect whatsoever. He emphasized on the importance of strengthening the regulator to bring claims management companies under control. He said that customers were being misled and the Association, lenders and the FOS were being placed under administrative stress for no fault of theirs. He wants claims management companies to be regulated better to ensure that the issue of misselling of protection insurance is sorted out as quickly as possible.

While admitting that Mutuals were minor parties involved in the mis-selling of PPI policies, the director-general affirmed that the Association was not complacent and encouraged customers to contact service providers directly in event of misselling of PPI. He said that customers did not benefit by handing over 25% of the compensation amount to claims management companies and should adopt an independent approach. He exhorted claims management companies to work in a responsible manner to ensure they can operate in a sustainable manner for the long-term.

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