CMR Consultation: Cutting the Costs for Consumers – Financial Claims
Following the submission of its Consultation Response to the Claims Management Regulator [CMR], 11 April 2016, the IBFSA’s activity relating to the proposals contained in the Consultation Paper continues. An overview of the response will be published shortly.
This is not a time for reflection, the financial claims management sector had very little time to complete comprehensive, evidence based responses to what is arguably the most controversial and important Consultation Paper released by the Claims Management Regulator.
During a 7 week period which included Easter holidays, the IBFSA experienced a ‘coming together’ within the Claims Management Companies [CMC] sector, action groups and CMCs large and small consulted and shared information with both the IBFSA and each other. The general consensus experienced by the IBFSA was that the proposals contained within the Consultation Paper, if implemented, would reduce firm’s revenues to such a level that it would result in closing down the sector, denying consumers ‘access to justice’ who have been victims of the largest financial mis-selling scandal in UK banking history, referred to as ‘bulk claims’.
Carol Brady’s Independent Review of Claims Management Regulation was often referred to: “It is important to note that CMCs provide access to justice for a wide range of consumers who may be unwilling or unable to bring a claim themselves. A well-functioning CMCs market can also act as a check and balance on the conduct and complaint handling processes of businesses, thereby benefitting the public interest. The overwhelming majority of stakeholders, including the banking and insurance industries which have been hardest hit by CMC misconduct, argued that there is a legitimate need for CMCs and that the Government should not seek to regulate them out of existence.
Consumer Support for CMCs – Populus survey
The IBFSA called upon the services of Populus who conducted a survey, 4th to 6th March interviewing over 2000 adults online across the UK asking 5 key questions relating to CMCs and mis-sold PPI.
These questions included:
- Should consumers have professional help to claim money back from banks that mis-sold their payment protection insurance?The answer was a resounding, yes, 67% agreed that consumers should have the option of professional help to claim money back from banks who mis-sold PPI.
- In the same way that Professional Services such as lawyers or financial advisors charge fees, to what extent, if at all, do you agree or disagree that regulated companies appointed by consumers that claim back mis-sold PPI should be able to charge a fee, provided it is clear, transparent and not mis-leading?The answer was more than half, 55% agreed companies appointed by consumers should be able to charge a fee.
The IBFSA will be publishing the Populus survey in full which also shows other key areas of consumer support for the CMC sector.
Membership
The IBFSA stated that it would not process existing or accept any new applications for membership during the Consultation period. Now this has been completed and following successful engagement with many CMCs, the IBFSA will be processing existing and welcoming new applications for membership.
The IBFSA secured excellent Legal Counsel and PR Advisors to ensure it was able to deliver a first-class evidence-based response as requested by the CMR. This it believes was achieved.
Thank you to all who helped make this possible.
