According to the latest annual report from the Financial Ombudsman Service (FOS), packaged bank accounts (PBAs) are the second most likely reason for a claim to be made via a claims management company (CMC). In view of the increase in PBA complaint numbers, the Claims Management Regulator at the Ministry of Justice (MoJ) has issued a special bulletin listing six important issues for CMCs to be aware of when acting in this area.
Firstly, CMCs need to understand what rules applied regarding PBAs at the time the account was sold.
Companies also need to carry out much more comprehensive information gathering than may have been the case with PPI claims. They need to establish:
• The benefits available under the PBA
• Whether these benefits would have been of use to the client at the time of the sale
• Which benefits the client has made use of (if any)
Just because one or more benefits under a PBA were not useful to the client does not necessarily mean that the account as a whole did not represent a good deal for the client. CMCs also need to make claimants aware that a PBA claim may lead to the account being cancelled.
Next, the MoJ says it believes that too many Subject Access Requests (SARs) are being made in respect of PBA claims, and that if effective information gathering takes place (see the first issue above), then an SAR should only be required in exceptional circumstances.
The fourth issue raised is a warning to CMCs to issue client-specific claims to banks. Using generic letters or checklists as the main basis for a claim is likely to constitute a breach of General Rule 2b of the MoJ’s Complaint Handling Rules.
Next, companies are asked to send a fully completed copy of the FOS’s ‘PBA complaint form’ whenever a complaint is referred to this organisation. Leaving the form incomplete, including failing to complete the section on why the bank’s resolution of the complaint is being contested, could be a breach of General Rule 2c. Asking a client to sign the declaration page without having seen the information on the rest of the form – which the MoJ believes is occurring at some CMCs – could also be a breach of General Rules 1 or 2.
Finally, companies are asked to use previous FOS decisions when assessing whether a claim has a reasonable likelihood of success. It is not acceptable under General Rule 2c to automatically refer all rejected complaints to the FOS.
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.