Simon Read: Mis-sold a mortgage? Don't use rogue firms
Saturday 12 March 2011
Ambulance chasers are becoming a major blight on the financial services industry. I'm talking about the claims management firms that contact people suggesting they may have been mis-sold a loan or mortgage. When folk hear the word "compensation" of course they're interested. But there's simply no need to go through – and pay – an intermediary to get recompense if you've been mis-sold by a bank or other lender.
This week I learnt of a particular irksome pair of rogues who are using their mortgage industry connections to encourage brokers to approach their clients with the promise of, presumably, riches if their claim is successful. I'm not going to name and shame the pair as I don't want to give them any further publicity, but both are reasonably well known in the mortgage broking and subprime sector.
In fact, in a classic case of poacher turned gamekeeper, both have been professionally involved with some of the lenders who may have been guilty of mis-selling. They will probably say that their inside knowledge helps their current role as claims managers. An alternative view is that they may well have been up to their necks in the mis-selling scandal and are now hoping to profit from it all over again by taking fat fees from borrowers.
The firm – and they're not the only ones by a country mile hoping to make a mint from the business – is hoping that mortgage brokers will accept money for putting their clients in touch with the claims managers. I suspect that the only ones who will be tempted to do so will be those who encouraged clients into taking out the wrong loan or unnecessary insurance in the first place. In other words, rogues looking to maximise profits from the very people they may already have disadvantaged.
Please don't think I'm having a go at mortgage brokers. The reputable firms still do a good job in helping people to find the right finance. But it looks as if the dodgy ones who encouraged clients to lie about their employment status or flogged them expensive cover are finding new ways to bleed people dry, which is alarming.
The regulators should take a stronger line in shutting down unscrupulous claims managers. Frankly, anyone who thinks they may have been mis-sold a mortgage or insurance should be able to take their own case to their lender or on to the Financial Services Ombudsman.
There really is no need to pay middlemen to chase compensation against a lender, especially when they may be the people who were responsible for many borrowers getting into a financial mess in the first place.
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