11May

It was a major development for the UK’s claims management companies (CMCs) when the Legal Ombudsman started considering complaints about them in January 2015. The Ombudsman has the power to issue legally binding instructions for CMCs to pay up to £30,000 in compensation to any customer who has their complaint upheld.

However, the Ombudsman is also seeking to help CMCs improve standards wherever possible. In a guest comment piece on the consumer financial website Moneysavingexpert.com, the Ombudsman’s head of claims management complaints, Simon Tunnicliffe, explains how his organisation will be sharing complaints issues with the claims management industry, providing case study examples and showing CMCs “what good looks like”.

He also comments: “Claims management companies are not all bad, but those that are have given the industry a bad name.”

He adds that: “Taking on claims management complaints is an important step forward for protecting consumer rights and bringing more awareness to customer service”, and highlights the Ombudsman’s independence by saying: “Whose side are we really on – consumers or CMCs? Well, the answer is simple: neither. We are completely impartial.”

The Ombudsman can adjudicate on complaints involving CMCs practising in the following areas:

• Financial products and services
• Personal injury
• Employment
• Housing disrepair
• Criminal injury compensation
• Industrial injury disablement benefits

Examples of reasons for customer complaints might include:

• Issues over costs and charges
• Whether the promised service has been delivered
• Delays in the claims process that could be the fault of the CMC
• Giving inappropriate or incorrect advice to customers
• Failing to keep the customer informed as to the progress of the claim

The article concludes by explaining the process customers need to follow, i.e. they should complain to their CMC first, and then if the company has not resolved the complaint within eight weeks, or does not resolve the matter to the customer’s satisfaction, then they can contact the Ombudsman.

The fact that the Ombudsman can now adjudicate on complaints means that a revised set of complaints rules have been introduced for all CMCs. Companies must have documented complaints procedures, which should cover:

• The definition of a complaint
• The requirement to acknowledge complaints in writing within five business days of receipt
• Who has overall responsibility for handling complaints at the company
• The need to issue a final response letter when the investigations into the complaint have completed, explaining: whether the complaint has been upheld or not, the reasons for the decision and details of any redress being offered
• The need to make the customer aware of their right to refer the complaint to the Ombudsman – this needs to be done either at final response stage, or after eight weeks from the date of receipt, whichever comes earlier
• The need to give the customer the Ombudsman’s contact details and to make them aware they must refer the complaint within six months of the final response
• That all staff within the company have been trained as to how to recognise a complaint, and what to do on receipt of a complaint.

The complaints procedures must be provided to clients in the following instances:

• Prior to them signing a contract with the CMC
• Whenever a complaint is made
• Whenever they request a copy

Existing clients of CMCs should also be informed of the recent changes to the complaints regime. This should be done on the next occasion that the company corresponds with a particular client. So for example, a written paragraph could be added to client letters, and a footer to client emails.

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.