There will be those who ask, “why is there a need for a professional financial claims association (PFCA) now? To answer this question one needs to think back to why financial claims management companies exist. Over the last few decades there has been a steady stream of financial product mis-selling. The mis-selling of Payment Protection Insurance (PPI) is probably the highest profile mis-sold product, but it is by no means the only mis-sold product. Previous examples include endowment policies and pension plans and current investigations are taking place in respect of ‘interest rate swaps’ and ‘packaged bank account’ products. Frankly, financial claims management companies only exist because the financial service industry has systematically mis-sold many product types over many years – a situation that seems to continue today. Financial claims management companies help consumers who have suffered mis-selling have access to justice and redress.
Should those who mis-sold financial products be the only voice?
All the different parties in the mis-selling and redress process are regulated by various bodies. The sellers of financial products are usually regulated by the Financial Conduct Authority (FCA) and financial claims management companies (CMCs) by the Claims Management Regulator/Ministry of Justice. Each of these regulators regularly has to consider and rule on policy matters; such as whether to limit by time, claims for the mis-selling of a particular product. Clearly such policy matters should not be considered without taking into account any potential consumer detriment. It would, after all, be wrong if a consumer who had suffered by being sold an inappropriate product was further disadvantaged by a policy decision. Financial claims management companies operate at the ‘sharp end’; they are the organisations who have direct contact with consumers and are well placed to consider policy proposals with a particular focus on whether any specific proposal may cause further consumer detriment.
Too many CMC’s for regulators
But of course, regulators cannot liaise with all financial claims management companies – there are too many of them. Regulators need access to a well-run professional trade association that has access to professional financial claims management companies who operate in an ethical way complying with a robust code of practice. Such companies are known for ‘putting consumers first’ and are ideally placed to be the voice of the consumer. Having aggregated the views of individual financial claims management companies a professional trade association is suitably placed to represent consumer interests with regard to regulations.
At the end of the day regulators, products providers and professional claims management companies should all have the same objective; making sure that a consumer who has been mis-sold receives redress in a timely and painless manner.
The PFCA exists to bring together the voice of professional claims management companies. We will work with regulators and product providers to improve practices and processes to ensure that those who have been mis-sold have access to justice and redress in a way that does not cause further consumer detriment.