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Consumers warned off CMC subject to multiple complaints over poor practices

Goldwag: Need to protect consumers

The Office for Legal Complaints (OLC) – the body that oversees the Legal Ombudsman (LeO) – has exercised for only the second time its power to name “in the public interest” an organisation responsible for dozens of complaints and warned consumers not to use it.

In the year to 31 January 2018, LeO has resolved 69 complaints about Claimline Direct UK Limited (CLD) and received over 100.

CLD is a Swansea-based regulated claims management company that deals with mis-sold PPI. In 2016, another CMC in that city, JAS Financial Advisory Services Limited, became the first company to be named in this way [1].

Back in 2014, barrister Tariq Rehman was the first and so far only lawyer [2] to named and shamed.

In a statement, the OLC said: “Through our investigations we have consistently noted that CLD have taken upfront fees of £495. They do not keep customers up-to-date or adequately progress the claims, and consumers have not received a refund of fees. CLD have not complied with our decisions directing a refund of upfront fees…

“We have concluded that we have seen a sufficient pattern of poor service from CLD, and therefore consumers need to be aware that if they use CLD it is likely that their PPI claim will not be progressed and they will lose their upfront fee.”

OLC board chair Wanda Goldwag said: “We have decided to publish because we are concerned that consumers may continue to purchase a service from Claimline Direct UK Limited that will not be delivered.

“We appreciate the impact these decisions may have on a service provider’s reputation; however, in this instance we have decided that the need to protect consumers is greater.”

The Claims Management Regulator is also looking into CLD under regulation 35 of the Compensation (Claims Management Services) Regulations 2006, which deals with investigating complaints or suspicions of unprofessional conduct.

LeO published a case study of the kind of problems it was having with CLD, citing the case of ‘Miss A’, who had four claims for potentially mis-sold PPI.

She paid the upfront fee but complained that CLD failed to progress her claims, failed to keep her updated, and failed to refund the upfront fee when asked to do so.

LeO found that CLD took no action between July 2015 and April 2016 on two of the claims, and then failed to conclude its claims process once it was confirmed that PPI had not been sold.

There was no evidence that CLD had ever made the third claim and, while the final claim had been made, CLD chased this once in two years. It treated these as having failed.

In line with CLD’s terms and conditions, the upfront fee should have been refunded. However, CLD told her that the claims were still ongoing and were impacted by the Supreme Court ruling last year in Plevin v Paragon judgement.

However, the ombudsman said the Plevin judgement was not relevant because PPI had not been sold in Miss A’s case.

Further, CLD claimed that Miss S was sent 15 regular email updates between September 2015 and July 2017, but was not able to provide copies of any of them. Miss S has said that she never received them.

“Without any evidence to the contrary, the ombudsman concluded that either these emails were not sent, or (given the complete lack of progress on the claims) any that were sent provided no meaningful update to Miss S. Either instance is poor service.”

The ombudsman’s final decision was that there had been poor service which required a remedy.

CLD was directed to refund Miss S the £495 upfront fee she had paid them, plus an additional £50 in recognition of the impact of their poor service and further to cancel any agreements they still had with Miss S, at no cost to her.