Who is at fault for the PPI scandal – Banks or CMCs ?
The Claims Management Regulator [CMR] has launched its ‘fee cap’ Consultation Paper in response to the Chancellors statement in his last budget. There has already been extensive press coverage of the consultation which could have far reaching consequences for those who require the assistance of professional firms in seeking access to justice.
The PFCA welcomes the CMR consultation and pledges positive co-operation. The PFCA welcomes the Claims Management Regulator’s (CMR) objective of promoting better value for money for consumers, specifically reducing nuisance calls and speculative claims by less reputable firms. Following consultation with professional counsel and our members, we will work with the CMR to provide an evidence-based submission to the Consultation Paper that supports our view that bad practices need to be penalised and best practices be supported so that consumers benefit. We encourage others in the industry to take a similar view.
Consumers fighting for compensation against powerful institutions
However, the PFCA is concerned that some specific suggestions set out in the Consultation Paper will not achieve this objective. We must not have such punitive fee structures that legitimate operators are driven from the market as in the end the main losers will be the consumers who are fighting for compensation against powerful financial institutions. We will be evidencing this argument in our submission and elsewhere in the coming weeks and months.
A professional service for victims of the PPI scandal
The PFCA believes that consumers should be able to rely upon a healthy free-market within the financial claims management sector (CMCs). This must provide consumers with a service which they are able to utilise when concerned that they may have been a victim of the PPI scandal. A professional service should always be a valued and trusted resource for those who need it. CMCs should not be seen as service providers who add little value and take advantage of consumers.
Working to help other CMCs
During this short consultation period the PFCA has taken the decision not to process existing or accept any new applications for membership. It will, however, be facilitating arrangements to consult/collaborate with other CMCs who may seek guidance in presenting their own response to the CMR Consultation Paper and will welcome any evidence or opinion which may help the PFCA’s own process. It is not seeking external financial resource.
The PFCA has secured excellent Legal Counsel and PR Advisors to ensure it is able to deliver a first-class evidence-based response as requested by the CMR.