Claims Management Companies will be delighted by today’s news that banks won’t be appealing the PPI ruling. But since you could easily claim the money back yourself, is it worth using them at all?
A quick recap: consumers who were mis-sold Payment Protection Insurance (PPI) can now, after a long court case, get their money back.
Not only that, but the banks have been ordered to contact affected customers to tell them they might have been mis-sold.
Are Claims Management Companies necessary?
This is great news for consumers – individual PPI refunds could easily run into the thousands of pounds.
It’s also good news for Claims Management Companies (CMCs), who offer to ‘handle’ your claim for you – they do all the leg work, and you pick up a cheque (minus their fee, of course). Today’s announcement that the banks won’t be appealing the court judgement means these companies will be ramping up their marketing, ready to cash in on the news.
But is it really so hard to get your money back? Well, no. Anyone who’s ever written a strongly-worded letter can put in their own PPI claim without using a CMC.
You simply complain to your bank, wait for their response, then complain to the Financial Ombudsman Service (FOS) if you’re not happy with their response, or if you don’t get one in the stated time. Which? has even developed a handy PPI tool to help you craft the first letter.
Should I claim back my PPI?
Sean Scullion, who now works at Which?, was mis-sold thousands of pounds’ worth of PPI in 2005. The insurance, he was told, would protect him if he lost his job.
Unfortunately for Sean, he was a contractor and therefore excluded from the cover, a fact which the salesman neglected to tell him at the time. So when he was unemployed for three months he discovered that the thousands of pounds he’d spent in PPI didn’t entitle him to any help.
Although Sean felt helpless at the time, he’s now been able to put in a claim to get all of his PPI back – without using a CMC. Because he hasn’t used one, he’ll be able to keep all the money the bank pays back, without having to give a large cut to another company.
DIY financial complaints
One of my favourite things about the internet (leaving Twitter to one side, of course) is the sheer amount of help available on really complex subjects. Using just the power of Google I’ve learnt to build websites from scratch, make the best banana bread in the world, prep coaxial cable and even refer a dodgy estate agent to the Ombudsman.
And finance is no different. All the info you need to make a PPI complaint is online, so luckily PPI is no longer a tricky issue, so it does look like Claims Management Companies are a bit redundant.
But perhaps I’m wrong – are you keen on a bit of finance or complaint DIY? Or do you think it’s worth paying for someone else to do it while you put your feet up?