GfK Mystery Shopping study reveals concerns in using CMCs

• specifically targeting vulnerable consumers in financial difficulties
• using potentially misleading 'no win, no fee' pledges
• offering unrealistic timescales for the claims process
• publishing unsubstantiated success rates

In addition, the study revealed that many clients are not being told about alternative mechanisms to resolve their claims, such as the Financial Ombudsman Service.

The GfK NOP survey states: 'There is clear evidence of CMC clients suffering as a consequence of using the services of a CMC. There is also evidence to suggest that, for many clients, if they had been warned of the risks or were aware of the alternatives, they would have been unlikely to use CMC services.'

CMC activities have been under the spot-light for some time; banks and building societies have reported uplift in CMC activity in recent months and a number of CMCs have run extensive newspaper and television advertising campaigns aimed at growing their businesses.

To read the full report, please go to the BAA website: "The impact of Claims Management Companies’ Activities on Consumers of Financial Services”