Which? has discovered a range of problems with claims management companies handling of payment protection insurance (PPI) mis-selling queries during an investigation.
The problems include misleading advice, unfair contract terms and a lack of transparency about fees.
The consumer watchdog said that most claims management companies did not follow rules set out by the Ministry of Justice and problems were identified with each of the 25 companies investigated.
‘Claims management companies must clean up their act, a Which? executive director Richard Lloyd said in a statement. All too often, consumers are being misled about their chances of success and how much they all have to pay – the last thing people need if they’ve already fallen victim to the PPI mis-selling scandal. We look forward to the Ministry of Justice taking swift enforcement action where appropriate, based on the findings of our investigation.
During an undercover investigation, Which? representatives posed as people who thought they might have been mis-sold PPI.
Two-thirds of the 25 firms investigated failed to advise the caller about the Financial Ombudsman Service and six repeatedly told the caller they had more chance of success or would receive more compensation using a claims management company than by submitting a claim independently.
Which? also found contract terms that it deemed unfair. The typical fee charged by a CMC is 30% of the compensation received (25% plus VAT), but Which? said the definition of compensation varies.
Rather than calculating the fee based on the lump sum of money paid to them, some firms include a reduction in future loan repayments as part of the compensation. As a result, some people could receive far less than they expect, Which? said, and in some cases even end up owing the CMC money.
Ever stopped to wonder if your insurance policy purchased on-line is “fit-for-purpose”?
Of course the schedule of insurance will include all the usual …
19 Jul 2019
The 2019 Inspiring Herts Business Awards’ “Family Business of the Year Award” was presented by Peter Smits, Managing Director of Ashbourne Insurance …
10 Jul 2019
Business insurance for tradesmen can be a minefield to navigate through, not only is there a need to ensure that you obtain …
7 Jun 2019