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.
No two insurance policies are the same, and without sight of your policy wording we can’t give any specific advice, however these …
3 Apr 2020
Ever taken a gamble on what you’ve purchased on-line is going to fit, or turn up undamaged?
The ease of shopping on-line cant …
26 Mar 2020
We are inundated with concerns and queries from customers due to travel abroad and those planning trips later this year regarding the …
3 Mar 2020