The PFS has received 40 complaints about the conduct of claims management companies (CMCs) in less than a week.
Evidence has been uncovered of CMCs issuing blanket calls for cash or escalating the complaint to the Financial Ombudsman Service (FOS) despite a financial adviser having evidence it is without foundation.
One adviser had evidence of a CMC issuing blanket complaints on annuity sales on behalf of clients without bothering to check whether any of what they were alleging even applied in the client’s case.
The CMC alleged that a client was not given the open market option of a joint life annuity or guarantee period, when the client actually purchased a joint life annuity with a 10-year guarantee period via the open market option.
The adviser, who wished to remain anonymous, said: “The claims management companies should be required to provide evidence of what they allege, as they waste so much time without any responsibility for their allegations.”
Another financial adviser was able to show the CMC how their client was financially better off because of their recommendation.
Despite this evidence, the CMC still referred the complaint onto the FOS, which concluded the advice
In January, the PFS announced it was collecting evidence of poor practice among CMCs that will be passed to the Financial Conduct Authority.