4th March 2010
The Ministry of Justice has confirmed reports that is
investigating claims management firm Client Cartel Review.
The firm, which offers to get consumers' debts wiped off by
claiming to their bank or lender that their credit agreement is
"unenforceable", has recently come under fire from thousands of
dissatisfied customers who say they have paid hundreds of pounds in
upfront fees only to hear nothing back.
The BBC Money Box programme recently revealed that the company
was being probed by the MOJ, a claim Cartel denied.
But the government department has stated: "The claims management
regulator (part of the MOJ) is investigating Cartel Client Review
and associated businesses.
"We are not able to comment on the specific issues, as to do so
could jeopardise the progress and outcome of these
investigations."
The probe is thought to be centered around Cartel's
dubious practice of taking upfront fees for cases that have an
extremely slim chance of ever being successful, and then holding on
to their clients' money and seemingly ignoring customers' enquiries
into the status of their claims.
One Cartel customer recently contacted Claims Financial; they
said they had paid £990 in upfront fees to Cartel in May
2008 but heard very little since despite repeated attempts at
corresponding with the firm.
The customer said that when he was eventually contacted by
Cartel earlier this week the agent suggested the company was
low on funds and awaiting a "bailout".
Debt write-off has been a controversial topic over the past
couple of years. Thousands of consumers have been promised by
claims management firms that they can have all their debts written
off in a matter of months, in return for an upfront fee usually
totaling hundreds of pounds. However, a negligible amount of such
claims have been successful and customers have lost even more money
and plunged into deeper debt as a result.
A recent High Court ruling dealt a major blow to the debt
write-off industry last December by closing a vital legal
loophole.
Before the ruling, consumers could have potentially had their
debts written off if their lender could not produce an exact copy
of the original credit agreement, many of which had been lost or
destroyed.
However, lenders now only have to produce the correct
information, not an exact copy.
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Mr R Evans 11 Nov 2010