Objective will not be achieved
We are happy to take part in the consultation, but despite our eagerness to engage we concluded, while collecting evidence for our response, that consumers would be poorly served if the suggestions in the consultation were adopted. The PFCA fully supports the intentions behind the consultation, the elimination of the rogue element of the CMC sector, but we feel that worthy objective will not be achieved by the proposals. We are also concerned that the intended consequence of the proposals could lead to the withdrawal of professional CMCs and the risk of cutting corners to meet the reduced income streams from CMCs who remain. Neither of these outcomes could be described as anywhere near satisfactory from a consumer point of view.
Carol Brady reforms
We are convinced that the Carol Brady reforms will achieve the desired effect in terms of removing rogues from the market. This will leave a well-regulated, compliant and professional market where the firms who remain in it are those who look after the best interests of consumers and help guide those consumers, who need help, through their fight for justice. As the Carol Brady review points out, “A well-functioning CMCs market can also act as a check and balance on the conduct and complaint handling processes of businesses, thereby benefitting the public interest.” Such checks and balances would not operate if professional CMCs are priced out of existence. Carol Brady also states, “The overwhelming majority of stakeholders, including the banking and insurance industries which have been hardest hit by CMC misconduct, argued that there is a legitimate need for CMCs and that the Government should not seek to regulate them out of existence.” Again, it would be wrong and the consumer would be the loser if professional CMCs are priced out of existence.
Consumer survey misold-PPI – Populus
The PFCA and its members care about consumers – so we asked them how they would be affected by the proposals in the consultation paper. We know the CMR required evidence based responses so we engaged Populus to carry out an independent poll. It shows that 67% of people believe that consumers should have the option of professional help to claim back money from product providers that mis-sold them Payment Protection Insurance [PPI]. Just 8% of consumers disagreed.
It also found that under half of people surveyed would feel confident investigating and reclaiming money from banks that mis-sold them PPI. Further, the results showed that 59% of people believe that CMCs’ campaigns have led to banks repaying consumers more money. The message is clear; consumers benefit from and need well-regulated professional CMCs.
Working with CMCs
While we await the response to the consultation from the CMR, the PFCA will continue to do what it does best; it will work with CMCs to continue the drive to better standards, it will work with stakeholders to improve processes and, where necessary, call product providers to account. Our objective in this is that consumers who need to make claims are treating fairly by all those in the process.
The Populus survey will be published with the PFCA consultation paper response.