Help - I've been ripped off by a dodgy claims firm
Q: My husband and I were taken in by Cartel Group, which has since gone bust.
We paid £495 upfront by credit card so it could reduce payments on our mortgage, and £110 'insurance' so it could save us money on one of our credit cards. Looking back, it really was all too good to be true. Can we claim the the money back?
A: Hundreds of people have made similar complaints about claims management company Cartel Group, which was closed down by the Ministry of Justice (MoJ) in March 2010.
The MoJ says that it's not its responsibility to intervene in a private contractual agreement. However, you can check if a company is legitimate through the MoJ's sister site claimsregulation.gov.uk.
But, even if a claims management company is authorised by the MoJ, the following words, bolded up on the website, don't exactly give claims management companies in general a ringing endorsement: "Authorisation does not mean that a business is recommended or endorsed by the Ministry of Justice."
The good news is that you can still get your money back. Under section 75 of the Consumer Credit Act, you can claim your money back from your credit card provider. If it declines this request, you can appeal through the Financial Ombudsman Service.
• Following Moneywise's advice, Dawn was successful in getting her credit card company, HSBC, to refund the full £605.
If you’ve have a complaint about a financial service product you have bought but the company you bought it from refuses to resolve your problem after eight weeks, the Ombudsman can help. The Ombudsman will investigate and resolve the matter. The Ombudsman is independent and its service is free to consumers. The Ombudsman may find in the company’s favour but consumers don’t have accept its decision and are always free to go to court instead. But if they do accept an Ombudsman’s decision, it is binding both on them and on the business.
Used by the holder to buy goods and services, credit cards also have a monthly or annual spending limit, which may be raised or lowered depending on the creditworthiness of the cardholder. But unlike charge cards, borrowers aren’t forced to pay the balance off in full every month and, as long as they make a stated minimum payment, can carry a balance from one month to the next, generating compound interest. As the issuing company is effectively giving you a short-term loan, most credit cards have variable and relatively high interest rates. Allowing the interest to compound for too long may result in dire financial straits.
Claims management companies
Regulated by the Claims Management Services Regulator since 2006, claims management companies offer advice and legal services in respect of claims for compensation, restitution, repayment for loss, damage or negligence. To many, the term is merely a polite euphemism for “no win, no fee” law companies. If you feel they offer services you need, approach with care.