Claims management firms use pressure selling tactics

There is increasing evidence of pressure selling tactics by some claims management companies (CMCs) in order to progress bogus claims for mis-sold payment protection insurance (PPI) to mutual lenders, the Building Societies Association has revealed.

These tactics by some CMCs can involve hassling people on their own doorsteps and are often directed towards elderly or vulnerable consumers.

Some CMCs demand an up-front fee from the consumer, even when there is no prospect of success, fail to disclose the percentage success fee that they take, or use the phrase ‘no win no fee' and still make some charge in the event of ‘no win'.

Case study 1

An elderly customer of a building society became distressed after two claims firm representatives came to her front door asking if she had any loans.

In a letter to her building society after the experience she told them that she was pressured into providing details of her paid-off mortgage and into giving authority to make a data subject access request for information.

She said that the men had told her that she could make a few pounds from a claim, but that after the experience she felt muddled up and unable to sleep.

The head of the building society's customer service team contacted the customer - who had not bought a PPI or MPPI policy - to allay her fears, but she is now wary about opening the door to anyone, and is concerned that the claims firm has her address and other personal details.

Case study 2

A claims management company managed to persuade an elderly lady whose husband had died into forging her deceased husband's signature to make a data subject access request (SAR) for them both.

The records held by the building society in question showed that the lady's husband had died two years previously. On contacting her it became clear that this elderly lady had been pressured into making the application.

A SAR is a request sent from an individual (the data subject) to an organisations (the sata controller) requesting all the information held about themselves. It is a legal requirement under the Data Protection Act for the data controller to comply with this request within 40 days.