December 11, 2014
Who Regulates CMCs In UK And How To File A Complaint?
Last couple of years have witnessed Claims Insurance Companies exploiting clients PPI claims. They have been criticized regularly, but still they take a cut of 25% of compensation from the awarded client. Many organizations have reported that CMC’s enormous incomes will doubtlessly double the complaints.
Many consumers even ask –
- Who controls the CMCs in UK?
- Who the actual claim regulator is? Is it FSA (Financial Services Authority) or FoS (Financial Ombudsman Services)?
The real regulator controlling CMCs is Ministry of Justice. Due to an increase in the mis-sold PPI refunds many CMCs have developed overnight. To protect consumer rights MoJ was given a power to authorize CMCs. License from MoJ is a legal necessity to operate CMC.
You have already paid the CMC 25% or more, but if you feel they have swindled you, a complaint can be filed. Ministry of justice (MoJ) is the real regulator of CMC’s. Unfortunately, the MoJ can only recommend the claim companies, but not force them to reimburse. Moreover, they have the authority to evaluate their license.
According to BBC news dated 22nd July 2013, the CMRU (Claims Management Regulation Unit) released figures displaying that there were 2435 registered companies dealing with PPI claims in March 2012. These collapsed to 1700 in June 2013.
Customers must take action instantly, if there is an unfair amount taken from them because CMCs can cease trading practice or disappear any time.
How to file a complaint at MoJ?
- Contact CMC directly – It is necessary to complain to the CMC you are unhappy with. Give them an opportunity to resolve this issue. Remember to write and send it. It must be marked as a complaint with the issue explained in simple words and steps you expect from CMC as a solution. A deadline should be provided for the CMC to respond.
- Once the complaint is submitted, the CMC will respond within 5 working days. The details of the internal complaint handling process along with the individual handling your case will be provided.
Four weeks of time must be given to the CMC for:
- Giving a final reply
- An explanation for ignoring your complaint with an hint of when they will contact you now ( it must be within 8 weeks of your first complaint)
- After 8 weeks the claims management regulation form has to be filled. Your information will be used to enforce action against CMC in case conduct rules have been breached.
List of CMC under investigation
Consumers can now find out the latest information before hiring a CMC for their PPI claim process. They just have to log on at justice. gov. UK/claims-regulation/enforcement. A list of CMCs under investigation will be updated. If a consumer has ignorantly hired a CMC under investigation then they will have serenity that actions are taken against their complaints.
All the enforcement actions will also be published, which will clearly convey a clear message to claim firms that breach of conduct rules will not be tolerated. This will help to evade the malpractice and enhance the reputation of vast CMCs following the rules.
Simon Hopes is a reputed financial advisor in Lancaster. In her blog posts she also mentions how people can Reclaim PPI mis-sold to them. You could visit their official website now to get more details on the claiming procedure.