Case study 11 – Disputed fees

Case study 11 – Disputed fees

Mr Z instructed a claims management company (CMC) to claim mis-sold mortgage payment protection insurance premiums from his lender in November 2013.

Mr Z signed the CMC’s Terms of Business (the terms) and the CMC sent a claim to the lender. The lender did not respond so a complaint was made to the Financial Ombudsman Service, which resulted in the lender making an offer of compensation of £889.12 to Mr Z in June 2015. The offer included compensatory interest, from which the lender deducted tax. The lender sent a payment of £765.30 to Mr Z and the CMC subsequently sent an invoice to Mr Z for their fee, which was based on the gross amount. As a result, Mr Z complained that the fee was charged on the gross amount, rather than on the net amount that he received.

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December 7, 2015