Legal Ombudsman slams claims management firms

Claims management firms have come under fire from the Legal Ombudsman, after it revealed 9,000 enquiries from consumers about complaints since taking over jurisdiction of the industry six months ago. It believes that such firms are offering unjustifiable fees and offering poor advice to consumers.

The majority of claims are linked to payment protection insurance (PPI) and  40% of the disputes it was examining were about CMC costs, including fees. The remaining complaints were based around delays to customer’s claims and failures to provide a satisfactory level of advice. So far, 478 cases have been resolved with the average financial compensation coming to £650. The industry has also come under fire from consumer groups on cold calling and from banks for being the reason for delays in resolving PPI claims. Chairman of industry body the PFCA, Nick Baxter, said: “There are some rogues which need sorting out. They need action taken against them and the regulator should use the mechanisms available to ban those firms. “There is a major review to determine where regulation should sit and what additional powers they should have to ramp things up further. “Professional firms absolutely want to do things in the right way. They are at a competitive disadvantage against a noisy few because they adhere to the code of practice.” The Legal Ombudsman, is a free service, which is available to the consumer to resolve any complaints about legal service providers. The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article. Setfords Solicitors are a national full service law firm, with dispute resolution solicitors in Guildford and across the country.