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DP10/1 to contact the authors
28 March 2011
This Feedback Statement reports on the main issues arising from Discussion Paper 10/1, Consumer complaints (emerging risks and mass claims).Newsletter [PDF]
DP10/1: (March 2010)
Consumer complaints (emerging risks and mass claims)
FSA/OFT/FOS Coordination Committee
Memorandum of Understanding between the Claims Management Regulator and the Financial Services Authority [PDF]
FSA Handbook
A Debt Management Today reader has taken a claims company to court after allegedly falling victim to a 'no-win-no-fee' scam.
When 48-year-old Anthony Carwardine, from Gillingham, was cold-called by Beneficial Claims approximately two years ago, he was so eager to get his debts being wiped off that he borrowed £2,000 from a friend in order to pay the fee quoted by them. The company promise to wipe off certain debts for clients using legal loopholes.He said: “I received a call from Beneficial Claims who said that they could help with a loan I took out with Lloyds TSB in 2005. They told me all I had to do was pay an administrative charge of £200 to look into my case.”“Things like this never happen to me but I thought it sounded good so I’d give it a go.”After receiving Anthony’s money, the company asked him to provide paperwork and details of his loans. They then supposedly scrutinised his loan policies in order to find out whether they were legally enforceable. A few weeks later, the company told Anthony that he had a “really good case” and assured him they would be able to take on his case after he paid a one-off fee of £2,000 on a no-win-no-fee basis.Thinking that he would soon be debt free from having his hefty loans quashed, he borrowed money to pay the fee. Anthony was assured that should his claim be unsuccessful, he’d receive a full refund.“They said the loan from Lloyds was unenforceable because of a loophole in the law and they also said that 99 per cent of their cases against Lloyds they won.“I thought I had nothing to lose and it would give me one less thing to worry about, seeing as I was going through a divorce at the time.”Some time passed, and Anthony sat back in the hope that he would soon receive word that he had been freed from debt. To his delight, Beneficial Claims soon got back to him and told him that he could cease paying his lender (Lloyds) as of October 2009, which he did.But after stopping repayments on his loan, it became apparent that Lloyds were not aware that their legitimate loan agreement with Anthony had been ‘wiped off’. It wasn’t long before debt collectors were knocking at Mr Carwardine’s door.Anthony did his best to find out what was happening. He called Beneficial Claims and visited their website, only to find that they were now trading under the name of ‘We Fight Any Claim’.Solicitors advised Anthony to log records of any phone calls and to write letters to the company. But the only written response he has had to date is a notification from Beneficial saying that his claim had been cancelled as per his own request.“They said I cancelled my claim because I asked for my money back, which wasn’t true,” said Anthony.Astounded by this case, the Debt Management Today team contacted Beneficial Claims/ We Fight Any Claim to try and uncover the truth. We were told that our questions couldn’t be answered over the phone but that they would be dealt with via email.So we emailed the address given to us, which was in fact yet another claims company that we hadn’t heard of, ‘YesLoans.tv’.We have not received a reply from YesLoans, We Fight Any Claim, or Beneficial Claims.Mr Carwardine estimates that the ordeal has cost him close to £3,000, after taking time off work through stress and calling premium rate phone numbers in order to find a solution.He has now taken the company to court in the hope that he will receive compensation and justice.“I hope no-one else falls victim to this company in the same way that I have,” said Anthony.Bankrupt football legend probed by police over loan fraud
Monday 2nd August 2010
Mortgage broker ordered to repay £1.5m of client money used to pay off debts
Wednesday 14th July 2010
Barclays lifts lid on banking write-offs
Wednesday 20th February 2008
RSS Feed News Archive
The Office of Fair Trading (OFT) has taken action against a company for making misleading claims in its advertising that suggested it was a debt charity.
The trade body told Money Advice Direct Limited, a debt management lead generation firm, that it was concerned about content in its marketing material and on its website that encouraged consumers to believe that it was a not-for profit-organisation offering debt management services.
Money Advice Direct Limited, which traded as The UK Insolvency Helpline, is a commercial business that passes the details of debtors on to paid-for debt management companies in return for a fee.
The OFT compelled the company not to imply that it is a publicly funded body or a debt charity and to make clear to potential customers that it does not “provide or administer debt solutions”. It must also not give the impression that its advice is impartial or independent and “ensure advertising of its debt management services is consistent with the standards set out in the OFT’s Debt Management Guidance.”
Ray Watson, the OFT’s director of consumer credit, said: “It is important that consumers seeking help for debt problems know who they are dealing with and whether the company is providing an actual service or is simply a lead generator.
“We would advise anyone in financial difficulty to seek free debt advice or check whether the company they are in touch with is a member of the Debt Management Standards Association, which has an OFT-accredited code.”
The regulator also wants the firm to change its trading name and intends to refuse its application to add the domain names “www.ivahelpline.co.uk” and “www.insolvencyhelpline.co.uk” to its license. It is thought that these names make the company sound to official.
Martyn Saville, Which? credit and debt expert, said: “A quick Google search for debt advice throws up a variety of sponsored links from commercial debt management companies and lead generators. I think it is unethical for fee-charging firms to promote themselves in this way. For company websites to compound the confusion in consumers’ minds is shameful and the OFT is to be congratulated on clamping down on these rogue firms.”
If the company fails to comply with the OFT’s ruling it could face a £50,000 fine and lose its consumer credit license.
Consumers struggling with debt problems can contact a number of free services that provide debt management solutions like Payplan and the Consumer Credit Counselling Service (CCCS). The OFT published its debt management compliance review in September of last year which revealed that it had warned 129 paid-for debt management firms that they must improve their standards.
Una Farrell of the CCCS said: “This is a very positive development. Dealing with unmanageable debt is incredibly stressful. Trying to work out where to seek help only adds to this stress, so it is important that those offering advice clearly state what they are providing.
“It is particularly important that consumers are not misled into believing a service is free when it is not, or that they are dealing with a charity when they are not.”
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A Debt Management Today reader has taken a claims company to court after allegedly falling victim to a 'no-win-no-fee' scam.
When 48-year-old Anthony Carwardine, from Gillingham, was cold-called by Beneficial Claims approximately two years ago, he was so eager to get his debts being wiped off that he borrowed £2,000 from a friend in order to pay the fee quoted by them. The company promise to wipe off certain debts for clients using legal loopholes.He said: “I received a call from Beneficial Claims who said that they could help with a loan I took out with Lloyds TSB in 2005. They told me all I had to do was pay an administrative charge of £200 to look into my case.”“Things like this never happen to me but I thought it sounded good so I’d give it a go.”After receiving Anthony’s money, the company asked him to provide paperwork and details of his loans. They then supposedly scrutinised his loan policies in order to find out whether they were legally enforceable. A few weeks later, the company told Anthony that he had a “really good case” and assured him they would be able to take on his case after he paid a one-off fee of £2,000 on a no-win-no-fee basis.Thinking that he would soon be debt free from having his hefty loans quashed, he borrowed money to pay the fee. Anthony was assured that should his claim be unsuccessful, he’d receive a full refund.“They said the loan from Lloyds was unenforceable because of a loophole in the law and they also said that 99 per cent of their cases against Lloyds they won.“I thought I had nothing to lose and it would give me one less thing to worry about, seeing as I was going through a divorce at the time.”Some time passed, and Anthony sat back in the hope that he would soon receive word that he had been freed from debt. To his delight, Beneficial Claims soon got back to him and told him that he could cease paying his lender (Lloyds) as of October 2009, which he did.But after stopping repayments on his loan, it became apparent that Lloyds were not aware that their legitimate loan agreement with Anthony had been ‘wiped off’. It wasn’t long before debt collectors were knocking at Mr Carwardine’s door.Anthony did his best to find out what was happening. He called Beneficial Claims and visited their website, only to find that they were now trading under the name of ‘We Fight Any Claim’.Solicitors advised Anthony to log records of any phone calls and to write letters to the company. But the only written response he has had to date is a notification from Beneficial saying that his claim had been cancelled as per his own request.“They said I cancelled my claim because I asked for my money back, which wasn’t true,” said Anthony.Astounded by this case, the Debt Management Today team contacted Beneficial Claims/ We Fight Any Claim to try and uncover the truth. We were told that our questions couldn’t be answered over the phone but that they would be dealt with via email.So we emailed the address given to us, which was in fact yet another claims company that we hadn’t heard of, ‘YesLoans.tv’.We have not received a reply from YesLoans, We Fight Any Claim, or Beneficial Claims.Mr Carwardine estimates that the ordeal has cost him close to £3,000, after taking time off work through stress and calling premium rate phone numbers in order to find a solution.He has now taken the company to court in the hope that he will receive compensation and justice.“I hope no-one else falls victim to this company in the same way that I have,” said Anthony.Bankrupt football legend probed by police over loan fraud
Monday 2nd August 2010
Mortgage broker ordered to repay £1.5m of client money used to pay off debts
Wednesday 14th July 2010
Barclays lifts lid on banking write-offs
Wednesday 20th February 2008
RSS Feed News Archive
I wish I had done this years ago instead of struggling through as best I could, maybe now I would be debt free
We aim to reduce debt in the shortest possible time. We are members of DEMSA - (The Debt Managers Standards Association). We adhere to the code of conduct as set out by DEMSA which aims to protect the interests of both consumers and lenders. The DEMSA code of practice is approved under the OFT (Office of Fair Trading) Consumer Codes Approval Scheme (CCAS).
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