Paul Clark CEO of Charter UK, a provider of enterprise complaint and feedback management software working closely with the banks comments on the fact that Which? has written to the government, urging it to clear up the claims process for people who were mis-sold payment protection insurance (PPI) and stop claims management companies (CMCs) cashing in at their expense.
“The first questions that springs to mind is why is the Ministry of Justice not saying what they are going to do about it? How is it going to ensure better working practices and why do CMCs fall into a grey zone when the FSA has made it abundantly clear to the banks that they need to revise their way of dealing with complaints?
Industry figures, which suggest that up to 25 per cent of the claims banks are receiving from claims management companies (CMCs) are from claimants who never had a PPI policy in the first place, highlight the size of the problem these firms are creating. I have said in the past that the FSA underestimated the amount of effort that would be required by the banks to resolve the PPI backlog, with up to 20 million consumers who potentially have a claim, and with CMCs adding to this stress with erroneous claims it is clear that for everyone concerned this is a step in the right direction.
CMCs are required to perform a series of checks with a consumer prior to submitting a claim. With such a high number of invalid claims being processed by CMCs, I have to ask if they are doing these checks properly. Those who fail to adhere to this rule should be investigated by the Ministry of Justice and face punitive action. However, because the Ministry is under resourced, it is simply not happening. Our question is who should be looking at this? What is clear is that stricter regulation is badly needed.
What we have witnessed is that banks have been working around the clock to put systems and processes in place to not only respond to PPI claimants in a timely manner, but to proactively contact customers who may have already been sold PPI. Banks have made it easier than ever before for customers to contact them directly, and the technology that is being used is making the end to end complaints and claims system very much more streamlined. We have always said there is a correct way of making a claim, and banks are now more prepared than they have ever been to respond and resolve them in a way that is efficient to them, and fair to the customers.”
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