24/07/2019
I popped out to do some grocery shopping earlier this afternoon and, in the car on the way home, I yet again heard an advert from one of the the many claims companies who have stripped significant amounts from the payouts made to people who had been mis-sold PPI.
Are recently, whilst their website still focuses on PPI, at least one firm has switched the focus of their advertising to investments. They ask whether people have lost money on investments sold to them by their bank, suggesting it was possible to reclaim the losses even if someone no longer has the investment or any paperwork relating to it.
Clearly, if someone was mis-sold an investment and last money, they would have a case for compensation; regardless as to whether they still had the investment or any paperwork. However, the critical point has to be whether or not the investment was mis-sold and, of course, the adverts don't bother mentioning this rather crucial requirement.
Then there's the fact that no-one needs to use these companies to pursue a claim. Anyone who feels they were mis-sold an investment can raise a complaint with the firm who sold them the investment and, if they do not agree with the findings of the complaints investigation, can refer the matter to the Financial Ombudsman Service (FOS) for an independent adjudication.
The use of a claims company doesn't increase a complainant's prospects of having their complaint upheld. The only thing it guarantees, is that they won't get the compensation they deserve. Instead, in the event that their complaint is successful, a proportion of their financial award will be retained by the claims management company.
Moreover, the claims management companies give false hope to people about the chances of being eligible for compensation and waste the time of companies forced to investigate spurious complaints.
In my opinion, no-one should resort to using claims management companies. If you truly believe you have been mis-sold an investment, complain to the firm who sold it to you. The firm will have to investigate the complaint in accordance with the rules of the Financial Conduct Authority (FCA), who regulate financial services in the UK.
Whilst this doesn't guarantee a fair outcome for the complainant, it does mean that there are two regulatory bodies (the FCA and the FOS) who are working to protect the interests of consumers.
One thing for sure, is that the claims management companies are not working to protect consumers, just to make a profit at their expense.
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