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Law360, London (May 18, 2020, 12:12 PM BST) -- British claims management companies can sign documents on behalf of vulnerable and elderly customers who are self-isolating, the Financial Services Compensation Scheme said Monday as it eased rules for third-party businesses overseeing claims during the coronavirus pandemic.
Britain's bankruptcy compensation scheme said it will accept application forms signed by claims managers on behalf of clients who are in isolation during the COVID-19 lockdown or do not have access to a printer or scanner.
The third-party claims company must ensure that the client has understood the terms and consented to the application form being sent to the FSCS, the agency said.
"CMCs must also ensure they include any confirmation in writing as part of the uploaded signed claim summary form so it's in one single file," the lifeboat fund said in an update to its website.
The program pays out to clients if a finance company goes bust. The scheme, which is independent of government and the financial industry, protects up to £85,000 ($102,000) in savings for an individual and double that amount for joint accounts.
Customers can pay claims management companies, or CMCs, a commission to manage the process of retrieving their funds from a collapsed lender or insurer.
The FSCS also updated on Monday its terms that dictate how third parties, including CMCs and solicitors, engage with it. The compensation scheme told them to carefully consider whether a claim has merit before submitting it.
The fund added that third parties must "learn from previous answers FSCS has provided and apply these learnings to its existing and future claims."
The Financial Conduct Authority said this month that it expects claims managers to allow banks and insurers more time to resolve complaints with a consumer before they escalate them to the Financial Ombudsman Service.
A finance company has eight weeks to respond to complaints from consumers about products they believe have been missold or services they are unhappy with. Consumers can then escalate their complaint to the ombudsman service if they are not happy with the bank's response.
The CMC sector specializes in making lucrative claims on behalf of consumers, such as those for missold payment protection insurance. The FCA took over supervision of more than a thousand claims management companies from the government in 2019.
--Editing by Ed Harris.
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