FCA fine firm just £91k for forging Client signatures

IFAs should no longer accept claims managed complaints with photocopied signatures without checking the facts.

On 18 December 2019, the First-tier Tribunal published a decision on Hall and Hanley Ltd (H&H), a claims management company (CMC), which focuses on claims for missold payment protection insurance (PPI).  This is a very important ruling for many IFAs who are plagued by fraudulent and false claims.

The tribunal upheld a fine of £91,000 imposed on H&H by the Claims Management Regulator (CMR), the former CMC regulator. The hearing for the tribunal was conducted by the FCA, which took over the regulation of CMCs on 1 April 2019.

The CMR found that, on 5 March 2019, H&H had breached rules, when reviewing a sample of 16 of H&H's client files, the CMR found that in eight of the files, clients' signatures on claim documentation (including letters of authority) had been copied without authorisation.  The CMR considered the unauthorized copying of clients' signatures, submitted by H&H to financial firms, to be a serious matter and considered H&H to have been negligent in failing to detect and prevent this conduct by one of its employees.

The tribunal concluded that H&H acted negligently in failing to provide proper training and supervision to its employees, and that the underlying matter was sufficiently serious to justify a financial penalty.

To IFAC it seems to be little more than a slap on the wrist for blatant fraud.  Many IFAs have received claims with flimsy signatures attached to template complaint letters, often leading to suspicion of fraud, broken relationships and long running battles with the Financial Ombudsman.  The matter has caused misery, and frankly those directors should be in jail.  Until now there was little the IFA could do about the matter.  But this ruling changes everything. 

What can be done about it?  If you receive complaint letters which do not look genuine, or do not appear consistent with what your client has said to your face, then you should pass them to IFAC or immediately back to the customer, attaching this article, noting that fraud has been prevalent in this sector, and that you have a duty to check that client does want to complain about you and your firm.. 

So many signatures are on poor quality photocopied templates, that this ruling now gives you the moral authority to stand up and challenge the case, in the name of fraud prevention, where hitherto we were forced to accept the claim and action accordingly.  You should also check the FCA registration number of the claims firm, and if another IFA, you should report them if they don’t have claims management authorization.