Local Financial Consultants FCA warning about CMC scams


Article by Phil

The FCA has issued a warning about the latest scam initiative to be sweeping the market, according to your latest local Financial Consultants review.

This one is by unauthorised Claims Management Companies (CMC’s) offering to help customers to write off their debts. In particular mortgage debts and arrears. The CMCs are offering to take legal action against lenders to get debts reduced and written off. But this requires an upfront fee to be paid by the customer. This is the scam element according to local Financial Consultants .

All CMC’s must be authorised by the FCA in the UK. Those who aren’t authorised are unable to provide any services or charge customers for their services. Sadly, customers caught up by these types of scams have no protection from the FCA, FOS or the FSCS. The CMC’s will not be able to help, and customers are likely to get into further financial difficulties with their lenders.

So please be aware and take care. Check the FCA first before talking to any CMCs to check that they area authorised and regulated.

There seems to be a lot of activity lately in government departments to crack down on scams and fraud. But also, tax evasion. HMRC has announced the collection of billions in unpaid tax and penalties as part of its “No Safe Havens” approach started in 2019. A big part of that success has been through the Worldwide Disclosure facility, which encouraged people to declare unpaid taxes under an amnesty scheme. This reduced the penalties for evasion and non-disclosure by encouraging individuals to come clean. It seems that it worked.

HMRC has also had a hand in the suspension of the Euro Pacific Bank in Puerto Rico. This bank was involved in worldwide money laundering and tax evasion activities. HMRC have written to all UK based clients of the bank requiring them to provide a full disclosure of their tax affairs. If they don’t local Financial Consultants warn that HMRC intend to prosecute.

In their latest update, the Financial Ombudsman Service (FOS) reports that it received just under 75,000 complaints in the first six months of the year to the end of June. That is fairly similar to the last six months. 34% of complaints were upheld. That means that 66% were dismissed of course.

The majority of complaints, over half were about banking and credit. Only 4,000 or 5% were about pensions and investments. Of these only 20% were upheld. Well below the average. The most complained about firm was Aviva, with 300 complaints. The other main ones were Prudential, Scottish Widows and Phoenix.


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