By Ruth Alexander
Reporter, Radio 4's Money Box
Cartel Client Review offers to bring financial claims on behalf of customers
An investigation has been launched into one of the biggest claims management companies in the UK.
BBC Radio 4's Money Box has learned that Cartel Client Review is being investigated by the Ministry of Justice, following complaints.
For an upfront fee of up to £495, the company offers to help customers bring claims against lenders for mistakes in their credit agreements.
The company denies it is being investigated by the regulator.
Customers in limbo
The BBC has been contacted by customers of Cartel Client Review who say they have paid hundreds - in some cases thousands of pounds - to get credit cards and loans written off, or to get compensation on their mortgages.
But despite being told their claims would be resolved in six-to-12 months, two years later it seems that thousands of customers are still waiting in limbo.
Tricia Page paid almost £500 to submit a mortgage claim in 2007.
She says the promise of several thousand pounds in compensation would have paid for her family to visit her father, who was terminally ill in Australia.
"We were told the risk with this £495 was minimal. If there was no money to come back to us we would get all but ten pounds back.
"And the paperwork I have says this should go through within a period of about three-to-nine months and, I thought, that's ideal - if something came through in three months, we'd be able to go and see my dad.
"Now we're two years on, my father has since died, and we don't have the money or anything."
Cartel's terms and conditions say the £495 you pay upfront for a mortgage claim is refundable if the claim is not successful.
In November 2008, Trisha demanded a refund but Cartel Client Review refused to pay her.
In frustration, she contacted the Jonathan Vernon-Smith consumer programme on BBC Three Countries Radio in January.
Once the BBC became involved, Cartel Client Review told Trisha that her claim would not be successful and has offered a refund.
The company says the reason for the delays customers are reporting is that it has been waiting for judgements in court and it says there has never been an issue with refunding cases.
After an initial assessment by Cartel Client Review, eligible claims are passed to a firm of solicitors.
Legal experts at Consumer Credit Litigation Solicitors (CCLS) review the paper work for each case to decide if customers have a valid claim.
But a paralegal who was formerly employed at CCLS, has told the BBC that the vast majority of customers he dealt with had no claim.
Colin Power said he reviewed potential mortgage claims, which were colour-coded according to their likely success:
"With a green case, there would be no success whatsoever - that's it, there is no claim that can be made against the lender. I would say that around about 99.9% of the files I dealt with were what were classed as green files."
Cartel Client Review disputes Mr Power's account and said he is not independent as he now works for a competitor.
The firm also said it is the only company across the UK that actively can do this work with a legal firm and that it has got very positive results.
Cartel Client Review and CCLS deny they are being investigated by regulators, claiming they have "always maintained a strong relationship with the Solicitors Regulation Authority and the Ministry of Justice."
But sources confirmed they are being investigated.
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