Mortgage Solutions has received an increasing number of anxious queries from customers regarding claim management firm Capital Returns, which promises compensation for borrowers who have paid too much in charges on their mortgages.
One consumer said he was contacted by the firm, which informed him that he had been overcharged in excess of £4000 by the now-insolvent mortgage broker Black and White Mortgages.
He said: “Capital Returns told me that if I paid them £95 to start the claim process and further payments of up to £995 at certain times, they could return the money due to me along with the fee once the case was settled.”
Steve Handon, manager at Capital Returns, said the firm wanted to help customers who felt they had been overcharged.
He added: “We will look into cases if we believe a client is at a financial disadvantage due to excessive charges. We have recently been communicating with people who are questioning their dealings with Black and White.”
Suzette Browne, spokesperson at the Financial Services Compensation Scheme (FSCS) – which was set up by the Government to compensate customers if a firm is unable to pay claims against it due to insolvency – urged consumers to consider their options.
She said: “Consumers can choose to go to a claim management firm, but we are a free, government- backed service that can help claimants with queries.”
Jock Cassidy, managing director at Ashley Law, said he feared that consumers did not always get clear instructions from claim management firms.
He added: “I believe that consumers should go through formal legal procedures if they have a claim. There has been a proliferation of claim management companies recently. While they are legitimate, they leave themselves open to the suggestion that they are profiting by preying on people who have fallen into debt and who are in negative equity.”
