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FOS upholds four in 10 complaints about claims management companies

Emma Lunn
Written By:
Emma Lunn

The Financial Ombudsman Service (FOS) has published data about claims management companies (CMCs) for the first time.

The FOS has been able to consider complaints about claims management companies since 1 April 2019. It has published data about these complaints in line with the FOS’ established approach to quarterly complaints data for financial products and services.

This means it’s only published figures for claim activities where it has had 30 new and 30 resolved cases during the reporting period.

The FOS received 262 enquiries about CMCs in the first quarter of this financial year, 117 new cases and 17 referrals from the Legal Ombudsman. In total, 43 per cent of cases were upheld.

Customer service, fees and delays each accounted for about a third of complaints the FOS received about CMCs.

About 60 per cent of CMC cases involved payment protection insurance (PPI). Other categories of CMC complaints include accident management, consumer credit, packaged bank accounts and holiday sickness.

The FOS heard from people who believe they’ve been scammed by a CMC – sometimes having paid upfront fees on the promise of a large PPI payout, or having been offered a gift card they haven’t received.

The Ombudsman said the CMCs in question are often acting without authorisation, or are fraudulent “clones” of legitimate authorised firms.

Overall, from April to June 2019, the FOS received 136,681 new enquiries and 70,304 new complaints – with 12,538 complaints passed to an ombudsman for a final decision.

On average, it upheld 30 per cent of the complaints it resolved. PPI continued to be the most complained about financial product, accounting for 44 per cent of all complaints received.