On the day of a major summit to restore consumer trust in the process of reclaiming mis-sold PPI, MoneySavingExpert.com and Which? find people vulnerable to exploitation by unscrupulous claims management companies (CMCs)
New figures from Which? and MoneySavingExpert.com reveal that consumers are turning to CMCs because they don’t know how to claim back mis-sold payment protection insurance themselves for free. The news comes as Which? and MoneySavingExpert.com launch a new campaign to increase awareness of how easy it is for consumers to reclaim mis-sold Payment Protection Insurance (PPI) for free and to tackle head on those unscrupulous claims management companies who exploit consumers wanting to claim back their money.
In a survey of over 2000 people:
- Worryingly, a quarter of people (25%) did not know that claims management companies take a fee – usually 25% plus VAT, and only half of people (49%) knew that using aCMCwould be no more successful than making the claim themselves.
- Just over a quarter of people said that the main reason that they would use a CMC, if they were to make a claim in the future, is that they would not know how to make a claim themselves.
- Over half of people (53%) who have used aCMCto get back mis-sold PPI said they’d be unlikely to use one again. The biggest complaint was about value for money, with 37 per cent of consumers unhappy on this front.
- A huge 93 per cent had seen or heard adverts about claiming back PPI, with 88 per cent of people seeing television adverts.
- 65 per cent of people said they’d received phone calls from CMCs about PPI, 55 per cent had received text messages, 54 per cent had received letters.
- One in ten (12%) of those surveyed were themselves, or knew someone, still waiting to get back their mis-sold PPI.
- Survey respondents told us that free online claims forms, letter templates and help lines would encourage people to make a claim themselves.
These findings come ahead of today’s major ‘PPI Summit’ with all the major banks and credit card providers, regulators and the Financial Ombudsman Service. The aim is to get all parties working together to help people get back the money they are owed and help to improve the PPI claims process. A separate meeting with representatives of claims management companies will follow.
A radio advertising campaign will also be launched to raise public awareness of this issue –listen here.
MoneySavingExpert.com’s Martin Lewis said:
“Sadly PPI has become a cash bonanza for unscrupulous claims companies, who through a series of lies and misdirection are persuading people they are the only option for getting their PPI money back. Even I’ve been texted to be told I’m owed £3,000 PPI – though I’ve never had the product.
“If people make a rational decision to give a huge 30 per cent of what they’re due to a claims handling company in full knowledge they could do it themselves – I’ve no problem. Yet sadly very few are in that position. Many are persuaded under false pretences and the dire lack of regulation means it’s tough to tell legit firms from the rest.
“And worse, if things do go wrong with claims companies, it’s a nightmare to get any redress. This is a billion pound plus industry – it’s too big to be left alone.”
Which? executive director, Richard Lloyd, said:
“This new research shows that many people don’t realise there are simple, easy to follow steps to reclaim their money for free and so they’re turning to claims management companies, too often unaware they charge a fee.
“It’s encouraging that the banks are going to work with us to help put this situation right and help their consumers reclaim mis-sold PPI. It needs to be as easy as possible for people to get back their money. Many people have told us that free online claims forms, letter templates and helplines would help them to make a claim themselves, so we want to see action.”
Notes to Editor
1. Which? surveyed 2,036 members of the general public from 13th to 15th April. Of these 2,036, 130 had made a PPI (payment protection insurance) claim using a claims management company.
2. An audio file of the advert to raise public awareness on reclaiming PPI is available for download from www.moneysavingexpert.com/ppiadvert
3. A full attendee list for the Summit will be released ahead of the Summit.
4. Both Martin Lewis, Moneysavingexpert.com and Richard Lloyd, executive director of Which?, are available for interview.