Consumers could lose £2bn slice of PPI redress to claims management firms, warns Which?
Published ¤ 23/05/2011 09:45:26
Consumers could lose out on over £2bn in Payment Protection Insurance (PPI) redress by going to claims management companies (CMCs), warns Which?
With an average payout of £2,750 for mis-sold PPI and CMCs taking as standard a 25% cut as their fee, consumers could pay £825 each for something they could easily do themselves.
What's more, people who claim back PPI sold with a loan could find themselves owing money to their CMC, even in the event of a successful claim. If the loan is still being repaid, redress often comes in the form of a reduction of the outstanding balance leaving the consumer to pay the CMC's fee out of their own pocket.
Which? is calling on consumers who think they may have been mis-sold PPI to complain to their bank themselves and has created a free online PPI complaints tool to make the process easier.
The consumer champion is also urging any consumer whose bank rejects their complaint to go to the Financial Ombudsman Service (FOS), which is independent and free to use.
Which? is calling on banks to drastically improve their complaints handling, reducing the burden on the FOS and the proportion of PPI complaints it upholds in favour of the consumer.
Which? chief executive Peter Vicary-Smith, says: "Anyone who thinks they may have been mis-sold PPI should complain directly to whoever sold it to them. By going to a claims management company, you'll pay what could be a lot of money for something you can easily do yourself. If your bank rejects your complaint, always go to the Ombudsman - most complaints about PPI are upheld in favour of the consumer."
Which? has joined forces with Barclays to launch a national public awareness campaign to help consumers avoid the pitfalls of CMCs and instead use Which?'s free online PPI tool to guide consumers through the complaints process.
Deanna Oppenheimer, Chief Executive of Barclays UK Retail Banking, says: "We are firmly focussed on resolving complaints from our customers as quickly as we can and we are pleased to partner with Which? in this effort."
Paul Skinner, from PKS, one of Hampshire's top mortgage and insurance brokers said: "The banks have sold payment protection insurance (PPI) for years, and often made no effort to ensure the product was suitable for the client. It is time that people took them to task, but without making millions for the CMCs.
"If you are unsure of whether or not you may have a claim against your bank, ask any insurance broker or financial adviser - they will be able to tell you, and may even help you with your claim."
For "truly" independent mortgage and insurance advice, call PKS!
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