A leading body has asked customers claiming to have been ‘mis-sold’ policies to complain right away to the company that handed over the policy to them instead of knocking on a claim firm’s doors for compensation.
The Association of British Insurers (ABI) warned consumers that they could have to let go of their compensation money if they relied on a claim firm for compensation. It coaxed them to appeal for “mis-selling compensation” directly with their policy providers.
According to a recent study, the ABI discovered that in the second quarter of 2005, as many as 49% policyholders with complaints filed directly with the company had received help, against a lesser 46% of customers that went to a third party for their compensation claims.
ABI's director of life and pensions, Chris Kenny, said, “There is no need for consumers to resort to using a third party to pursue a complaint. A free process already exists within companies, and then via the Financial Ombudsman Service, that is open to everyone with a valid complaint. Claims management companies often take large chunks of the customers' compensation as their fee - on average a quarter (and in some cases more).”
The ABI notified further that only a few claim management firms were regulated by the Law Society, with most of them being unregulated. It, thereby, summoned its members to stop dealings with middlemen for claims and compensate consumers directly, later billing the consumer for this job.
The ABI is conducting this operation in alliance with the Association of Independent Financial Advisers for cautioning customers besides making them aware of a system wherein they can apply for compensations directly to the providers.
Nevertheless, chief researcher at consumer group, Which”, Teresa Fritz, felt that this declaration by the ABI was not correct and it would be better for the organization to ask its members instead to reform the consumer complaints system. She was quoted saying, “If the industry had treated its customers fairly from the start we wouldn't have the plethora of compensation-handling companies we have.”
She added that Which? had been advising its customers repeatedly for years that they did not require to pay money to third parties for claims, along with redirecting those whose claims had not been accepted, to the Financial Ombudsman Service (FOS).
Posted
on : Wed, 19 Oct 2005 18:40 GMT | Insurance News
By : Paula Jenkins
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