A claims handling company that cold called people under the name ‘Money Claiming Experts’ has lost a High Court battle for infringing the Money Saving Expert” trademark.

A judge ruled on Wednesday that claims handler Client Connection Limited (CCL) – which counts cold-calling victims of payment protection insurance (PPI) mis-selling as part of its business infringed the mark by previously operating under the name Money Claiming Experts.

During telephone calls made to clients, CCL held itself out as the “Money Saving Expert” or was heard by the recipients describing itself in this way. This prompted a slew of damaging complaints to Martin and the website from people who assumed it was linked to the site or Martin Lewis.

MoneySavingExpert has consistently campaigned in favour of PPI mis-selling victims taking action to reclaim their money but has never advocated using a claims management business to do so. Borrowers who have been mis-sold PPI can use the lender’s own complaints process and the Financial Ombudsman Service to win redress.

Mr Justice Norris, sitting in the Chancery Division of the High Court, said the evidence demonstrated “conclusively” that witnesses identified Martin – and no-one else – with the name “money saving expert” and that the trademark was “distinctive to the claimant”.

During the hearing, the evidence made it clear that “CCL was exploiting the claimant’s well-built and trusted name”. The judge said that he would also have held, had the matter gone to a full trial, that CCL’s use of the trading name “Money Claiming Experts”, involving cold-calling customers, “would have tarnished the claimant’s mark”.

He added that the evidence showed that CCL “was riding on the coat tails of the claimant’s registered mark and benefiting from its power of attraction, its reputation and its prestige”.

Martin Lewis, creator of MoneySavingExpert.com, comments:

Whether there will be damages has not yet been decided, but if so, they will all be donated to the Citizens Advice Bureau charity. This case wasn’t brought to make money the aim was to serve as a warning that we will not tolerate anyone trying to confuse members of the public in this way and especially those in a financially vulnerable position.”

Moneysavingexpert.com is the UK’s biggest money website, with 6.2 million users opting into Martin’s weekly email. In June, it had 10.4m unique users, making 18.9 million separate visits.

In May, the banks’ trade body pulled out of legal action to stop the multi-billion pound payout of payment protection insurance (PPI) compensation to mis-selling victims.

It is estimated victims could be due a combined 9 billion in compensation as a result.

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The number of consumers making claims to get compensation when a financial firm is unable to repay them has gone up, show new figures published today.

The Financial Services Compensation Scheme (FSCS) today revealed in its annual report that the number of new claims made by customers this year (2010/11) has gone up by 25% compared to last year’s figures (2009/10).

During 2010/11, the FSCS received close to 39,500 new claims from consumers and decided more than 47,000 claims than it did in 2009/10.

There was also a whopping 75% increase in the number of enquiries received, with a total of 167,600.

The FSCS deals with claims against firms authorised by the Financial Services Authority (FSA) that are unable, or likely to be unable, to pay claims against them, generally because a firm has gone into default.

The Financial Ombudsman Service (FOS) on the other hand deals with complaints against authorised firms that are still trading.

This year (2010/11) the FSCS paid more than 535 million to over 47,000 claimants.

Why have claims gone up?

The FSCS says the failure of investment firm Keydata was a key contributor to the rising number of complaints, with the FSCS resolving more than 27,000 claims arising from the firms failure and paying out 214 million to investors (see the Norwich & Peterborough to pay Keydata victims 51m news story).

There was also a rise in the number of Payment Protection Insurance (PPI) claims, which accounted for just over 20% of new claims and the FSCS expects to receive a continuing high volume of PPI claims in 2011/12.

The FSCS has the capability to pay out the majority of depositors in a failed bank, building society or credit union within a target of seven days and all depositors within a target of 20 working days.

It does however, have set limits on how much compensation consumers can receive.

Mark Neale, chief executive of the FSCS, says: “During 2010/11 the Financial Services Compensation Scheme faced another challenging year of increasing claims volumes and maintained its

focus on protecting consumers.

“We made substantial strides during the year in providing an even better service to consumers and the industry and will be building on this during 2011/12.”

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Lloyds Banking Group has said “sorry” for flogging worthless payment protection insurance (PPI) policies and promised a catalogue of measures to provide compensation for victims, in yet another sign of capitulation by banks.

The UK’s largest PPI seller with an estimated 40% market share says in an interview with MoneySavingExpert.com some of its sales processes were flawed.

The apology adds to the huge turnaround in language from Lloyds and the rest of the banking industry. Lloyds has already set aside 3.2bn to pay claims on PPI to cover loan or credit card payments if you cannot work.

Lloyds is drafting in 500 staff to deal with the huge backlog of cases and has promised to re-open complaints from those who’ve previously had a rejected claim who try again.

Barclays said yesterday it will refund anyone, with no questions asked, whose claim was put on hold on or before 20 April, though Lloyds which includes Lloyds TSB, Halifax, Bank of Scotland and Black Horse will not do the same.

Barclays, Lloyds and most other banks sat on claiming pending the result of a failed judicial review where banks unsuccessfully tried to overturn Financial Services Authority rules that force them to contact those mis-sold as a result of systemic problems.

However, it’s still vital victims get their complaint in as banks won’t contact everyone (see the Loan PPI or Credit Card PPI reclaiming guides for template letters).

Lloyds PPI director Ian Hallett, appointed in the newly-created role in March, agreed to answer your concerns on PPI mis-selling and the reclaiming process (in bold font). Here are his responses (in normal font).

Do you accept Lloyds mis-sold PPI and what is your message to victims?

We acknowledge there are cases where we could have been clearer in sales processes and as a result we didn’t meet standards we set. For that we are extremely sorry if people have a cause for complaint.

Why did this happen?

As with many financial products, there are a lot of factors involved that contribute to how a sale is completed, such as the design of the product, the sales processes and regulatory requirements.

When looking at cases we tend to see reasons that are specific to the actual sale for why our high standards may not have been met.

What will you do to pro-actively contact customers who were mis-sold systemically?

We have already started contacting customers where we have identified common trends.

We are always analysing trends and coupled with information from discussions with the Financial Ombudsman Service we may identify more areas. Our primary method of communication will be letter. More complaints from consumershelp us understand trends of systemic mis-selling.

When will the letters be sent?

It is an ongoing process which started for some at the beginning of the year, even before the judicial review (see the Halifax credit card PPI refunds MSE News story). There is no end date as we will send letters as and when we identify trends.

Will you contact people mis-sold where the problem was not systemic, say where the adviser made an error or deliberately mis-sold?

We will only contact customers where there may have been a systemic problem.

What happens to those who’ve had a rejected complaint in the past? Will you contact them again? Or will you re-open the case if they contact you?

If a customer isin that situation with new concerns we would encourage them to get in contact with us.

Every form of complaint we treat seriously and along the same process even if they were rejected previously.

We need to remember, as I said earlier, that if we identify a systemic issue, those who have complained in the past [who were rejected] will be in the group that gets a letter.

What happens to people whose cases were put on hold given Lloyds, along with most banks, sat on claims pending the result of the judicial review?

If any customers that have a complaint are awaiting a response there is no need for them to do anything. We will get them a response by the end of August if they complained by 6 May.

For customers who have submitted a complaint on or after 6 May, we will provide a full response within 16 weeks of receiving the complaint [these are as a result of new FSA rules on cases on hold. Usually, banks have eight weeks]. We have recruited 500 people to help get that done quickly.

Will you follow Barclays’s lead in automatically refunding those whose claims were on hold?

No. However, we are handling all PPI complaints fairly and consistently regardless of when they were received. We will ensure we provide a clear response to every customer that has submitted a complaint to us.

What about people who were given a partial refund in the past? Say they had paid 2,000 for PPI but you only refunded 1,000. Will you contact them to give them the rest back? What if they come asking for the rest back?

We won’t contact them ourselves. We review complaints on an individual basis. If someone has a new concern they should contact us. It is hard to say if they’ll be successful or not as it’ll be assessed on a case-by-case basis.

Will you offer any damages on top of the premiums back and the interest charged on them?

We are required to consider this. The amount of compensation people are entitled to is different and takes into consideration all the factors at play so I cannot say how much we would award.

Will you set up a fast-track reclaiming system? If so, what?

No, we have no plans to. However, we want to give our customers guidance as to how they can help speed the process up. It is as follows: when they submit a complaint, use the Ombudsman questionnaire from the Ombudsman website and fill it out when they complain to us as it has so much of what we need.

If they can find documentation from when the sale was made then send it along. They can also write a separate letterif they wish but having as much information as possible will help us not have to write back to ask more questions, which takes time.

We need to have a specific understanding of the sale and need as much information as possible. We normally have eight weeks to resolve complaints but it can be quicker if they follow the guidance.

Can you promise you’ll look at cases fairly and avoid the fact the Ombudsman upholds up to 90% of some Lloyds customers’ complaints, mainly with Black Horse, which shows they were wrongly rejected to start with?

I can promise all areas of the business will be fair. It is not in our interest to have the situation you refer to. We want to ensure that will not happen again.

The standards we have are common throughout the business. We have a single PPI complaints handling process and it is monitored centrally with me in charge. These came in since the judicial review results.

Do you advocate the use of claims management firms to make a complaint?

I concur with what the Ombudsman says that the quality of complaint we receive doesn’t vary, whether people use a claims handler or do it themselves.

Even if they use a third party we may still need to talk to them or write to them.

Will you simplify your letters to customers as we’re told they’re overly complicated?

Some letters were over-complicated. We are changing letters imminently but some of the old style letters have already gone out.

Some customers have expressed concern that if they claim on PPI you may penalise them elsewhere, say by removing or reducing an overdraft. Is this true?

No. There is no relationship between PPI complaints and any other service from the bank, so this would not happen.

Why did Lloyds initially try to fight the FSA as part of the British Bankers’ Association judicial review before it announced whether or not it would appeal [which it eventually chose not to do] given you have now admitted liability?

The banking industry, including Lloyds Banking Group, shared concerns about some aspects of the regulation which created the legal process.

In April, there was a very clear judgement, and coupled with conversations with the Ombudsman, it gave us the clarity we needed which is why we said we’d no longer take part.

Our view

MoneySavingExpert.com creator Martin Lewis says: “It’s good to hear the word ‘sorry’, even if couched in banking speak. These policies were deliberately mis-sold to boost profitability and though it’s taken years of pushing, kicking and courts, finally justice is being done.

“Lloyds, sadly, hasn’t gone as far as Barclays, no doubt as its mis-selling exposure is so much bigger, so it is still cheaper for it to process and delineate between valid and invalid claims rather than just payout.

“Yet it does look like Lloyds now defaults to a position of sorting cases out rather than its old stance of deny, deny, deny and push people to the Ombudsman. That’s a big move especially with its willingness to re-look at past rejections.

“However, even with the new proactivity, it doesn’t mean people should sit on their laurels, just because the bank will contact some who’ve been mis-sold. Many more still need to get in touch themselves.

“So you must assume you won’t be contacted and continue to do a DIY complaint now.”

Thousands of consumers could be left without full cover after a home emergency insurance provider went bust.

Homecall+, which provides heating and plumbing cover, went into liquidation on 10 May.

Policyholders, who typically paid between 100 and 200 for annual cover, that bought insurance on or before 3 December 2010 should still be fully protected.

Anyone else may be protected by the Financial Services Compensation Scheme (FSCS), though this is not yet confirmed. If they are, they will only be covered for up to 90% of the value of any claim.

Homecall+ is regulated by the Financial Services Authority (FSA), but it now states on the FSA register that Homecall+, based in Blackburn, “must not carry on regulated activities” as it is “in liquidation”.

When MoneySavingExpert.com tested the Homecall+ website today it still appeared active and even allowed us to go through a policy purchase until the payment page, though we did not try to go further.

Cover bought on 3 December or earlier: your rights

Homecall+ did not provide insurance itself as it is a registered middle man with the British Insurance Brokers’ Association trade body.

Policies were backed by insurer Brit Insurance until 3 December 2010.

Brit says it will honour all claims for policies it underwrote until that date.

Cover bought after 3 December: your rights

It is not clear which insurer, if any, backed policies sold since then, which could make them worthless. This is where the FSCS may be able to step in.

The firm is not yet ‘in default’ by the FSCS definition, which signifies when a company has failed, as the compensation body is still conducting investigations.

However, if it moves into default the FSCS will either seek a buyer for Homecall’s book which would mean customers are fully insured by another firm, or the FSCS protection up to 90% of a claim’s value could kick in.

The FSCS says even where a regulated firm takes payment for insurance but there is no cover in place, it will honour its guarantee to protect 90% of a claim’s value.

That said, until it confirms it will pay claims, there is a potential risk to consumers.

MoneySavingExpert.com tried to contact Homecall+ today but its main number was constantly engaged. Meanwhile, its claims hotline routed the call to a third party.

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