- In Practice
- In Business
- Moving On
Steer clear of CMCs, financial watchdog warns bank litigants
City regulator the Financial Services Authority has cautioned small business owners against using claims management companies (CMCs). The warning comes at the end of a damning report on the mis-selling of interest rate hedging products which highlighted banks’ ‘poor sales practices across a number of products’.
The report argues: ‘Customers do not need to use a claims management company because the process is straightforward.’ The Ministry of Justice regulates CMCs, which were prominent in managing payments protection insurance claims, and are now marketing themselves to business owners who bought interest rate hedging products.
The FSA report will provide ammunition to business owners who have been campaigning for the regulator’s intervention. The Gazette has covered the progress of business owners’ claims which have been defended by the banks.
The FSA said it had reached agreement with Barclays, HSBC, Lloyds and RBS over a "redress" scheme. However lawyers warned that the scheme will not satisfy all potential litigants.
M Ali Akram, partner at LEXLAW Solicitors & Advocates, said: ‘The FSA redress scheme, which will not necessarily result in settlement for victims of mis-selling, does not take account of the contractual limitation period of six years which for many cases has either expired or is about to expire.’ Those sold derivatives in 2005-2006 could be left without redress.
There is no automatic refund set out in the FSA scheme, and the regulator’s statement admitted ‘appropriate redress’ could include a ‘partial refund’, or renegotiation of a business’s credit and product arrangements.
Excluded from the scheme are ‘sophisticated customers’, defined with reference to the business’s turnover, balance sheet and number of employees.
- Read Ed's blog on the FSA
- Unanimous: profession votes for ‘training days’ action in protest over cuts
- International firms call off merger
- Hundreds attend legal aid protest rally
- Small business spurning legal services – LSB research
- HMRC proposes crackdown on LLP ‘disguised employment’
- PCT will mean the death of Welsh justice, lawyers warn
- Poor will suffer from court fee changes, MoJ warned
- Overwhelming public backing for legal aid: poll
- Fight PI changes, says MASS chair
- Mass meeting of barristers takes a stand on QASA
- Pannone turns to fixed-price mediation post-Jackson
- Grayling asks for quality standard for PCT firms
- 7,000 lawyers to hit the streets for free legal advice
- Pilot aims to limit clinical negligence solicitors’ fees
- Will-writing could still be regulated
- In-house growth accelerating
- Appeal Court applies Russian law in dispute
- Insurers to revamp third-party code
- Court interpreters reject new contract deal
- European data plan labelled ‘demented’
- Saudi Arabia accepts registration of female lawyer
- Don’t worry about Jackson fallout – judge
- North-west paralegal initiative
- French revolution
- ‘Google’ asylum refusals