The sad reality is that various Claims Management Companies are going to employ the normal cold calling tactics and bombard you with text messages and phone calls, despite the regulators attempts to stop this sort of behaviour. Unfortunately, the regulators have not gone far enough as they have not banned cold calling. Therefore, unfortunately this is just a way of life. The best way of dealing with any Firms who do cold call you is to; either put the phone down; be rude (because quite frankly they are invading your privacy); or (my personal favourite) is to say yes it has all been dealt with and you are extremely happy.
The reason for the raft of cold calls that is expected is due to a recent High Court ruling at the end of 2014 in which a client of Paragon called Mrs Plevin (after obtaining a successful refund of her Payment Protection Insurance (PPI) by way of a reclaim) took the Firm to court and was successful in the Supreme Court (and therefore this cannot be challenged) in recovering further monies. The further monies were as a result of Paragon paying a large Commission out of the Premium to a third party. The court ruled that under the Consumer Credit Act this was unfair, in particular that the client was not made aware of this, and therefore held to be in breach of the Consumer Credit Act.
The client (whilst we do not know the exact details) was therefore able to obtain further recompense by way of a refund of all, if not a large proportion, of the Commission that was paid. Remember this was in fact on top of a Payment Protection Insurance claim which was successful. Therefore, this opens the doors to anyone who has had a PPI claim which has paid out to recover further monies and this is the reason why the cold calls may well begin again, in earnest.
The Financial Conduct Authority (FCA) have conducted a full study of the court ruling and the implications on the Lenders. They have decided that they are not implementing a full contact program which the Lenders must adhere to, but have said that any person wishing to claim a refund in relation to any Commissions paid are to contact the Firms directly. They have also not gone so far as to suggest that all Commission that was paid is to be refunded, but have suggested a refund taking into account those monies which are deemed excessive. The Industry average Commission was 67%. The FCA have suggested a figure of over 50% should be refunded. Therefore, if a Premium of £1,000 was taken and the Commission paid was 70% (or £700), the difference between 50% and 70% (namely £500 and £700) would be paid. Therefore a refund of £200 should be made. This is in addition to interest and compensatory interest.
However we have experienced in the past (particularly with Bank Charges back in 2006 and 2007) that some Firms, rather than argue about percentages are refunding the whole Commission to avoid any unnecessary litigation.
We have been dealing with complaints against Banks since the late 1990s and we are now looking at this form of complaint where, for anybody who has had a PPI refund in the past, we can look at now ascertaining the Commission you have paid and looking at obtaining a refund following the recent court ruling.