In December 2014, Mrs G instructed a claims management company (CMC) to make a claim for mis-sold Payment Protection Insurance (PPI) in respect of a loan with Lender A held jointly with her husband, Mr G.
Mr and Mrs G signed a letter of authority on 18 December; Mrs G was named as the main policy holder and Mr G signed as the joint policy holder. Mrs G also completed and signed a letter of authority for a credit card held solely in her name with Lender A. Mr G signed no other letters of authority.
Mr G received a call from the CMC on 22 December in which he was asked about other possible accounts held in his name. In the course of this call, Mr G specifically requested that the company did not make any other claims on his behalf as he wished to pursue any other potential claims himself. Mr G received no further correspondence from the CMC.
In April 2015, Mr G received a settlement of £1758.50 directly into his account from Lender A. Believing this to be a jointly held policy with his wife, Mr G transferred half of this amount to his wife’s account.
Mrs G subsequently received an invoice from the CMC. On querying the account with Lender A directly, Mr G discovered that the settlement related to an account held solely in his name. No offer had been made by Lender A in relation to the jointly held account at that time.
Mr G complained to the CMC that they did not have permission to process individual claims on his behalf; he argued that the letter of authority he had signed related solely to the account he held jointly with his wife. For this reason, he believed that the fees sought by the CMC were unjustified.
Mr G also complained that his data protection had been breached as the correspondence relating to his sole account had all been addressed to his wife and sent to her directly. He further complained that requests made to the CMC for the information they held about him had been ignored.
The CMC did not uphold Mr G’s complaint at the first stage of the complaints process but as a gesture of goodwill offered to reduce their fees by 50% to £316.53. As Mr G had already paid the fees, a cheque was sent to him by the CMC for this amount. Mr G remained dissatisfied with the response he received and brought his complaint to the Legal Ombudsman.
The Legal Ombudsman’s investigation found:
- That Mrs G had signed a separate authority for the CMC to complete a claim for a credit card held solely in her name. On a balance of probabilities, this demonstrated that a separate authority would also have been required by the CMC to make a claim in relation to Mr G’s individual accounts. No such authority had been signed.
- In the call of 22 December, Mr G gave the CMC specific instructions not to pursue any claims for accounts held solely in his name.
- For these reasons, any work completed by the CMC on Mr G’s individual accounts was done so without authority and consequently, at their own cost. This constituted poor service.
- The Legal Ombudsman was not the appropriate body to consider Mr G’s allegation of breach of the Data Protection Act; Mr G was directed to the Information Commissioners Office to pursue this aspect of his complaint.
- However, it was accepted that as all of the correspondence had been sent to Mrs G, Mr G was unaware that a claim was being made on his individual account and had no opportunity to challenge the CMC.
- Although information requested by Mr G had been provided, this was done on a piecemeal basis and he had needed to make three separate requests. This was deemed poor service.
The Legal Ombudsman concluded that the CMC did not have the necessary authority to pursue a claim on Mr G’s behalf. A full waiver of fees was therefore ordered and Mr G received a further cheque for £316.53. It was further ordered that £100 in compensation be paid for the frustration and inconvenience caused by the CMC both by their failure to deal with the requests for information and secondly, as Mr G had lost the opportunity to consider the offer made by Lender A, of which he was initially unaware.
Learning points for CMCs:
This case highlights to CMCs, the importance of:
- Ensuring that the appropriate authorities are held for each individual claimant and/or joint authorities where appropriate.
- Keeping customers updated at regular intervals throughout the course of the claim and ensuring that all correspondence is addressed to the correct party. Particular care should be taken where you are dealing with individual and joint claims for the same parties.