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Claims Management Companies are taking the PPI

Hand pouring money into another hand

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?

Karen says:
4 January 2013

Hi – I hope you can advise me regarding a Paymentshield PPI policy sold via a broker.
I have been reading some of the posts re PPI claimback as I have an issue with my PPI policy – I dont have my docs in from of me but the policy was sold to us via broker in 2006/7 who has since gone out of business and its with Paymentshield. At the time we were advised we needed to take it for the mortgage and that because my husband as self-employed and I was employed – he would not be able to claim – so we should have the policy in my name only – which we did. Since then I left my full time job and became a self-employed contractor. I called to cancel my policy on a number of occasions only to be told that I would definately be covered if I was out of work even though I was on 6 month contract – but this seems to be a very vague area. So each time I called I was talked out of cancelling and was told that I would still have to pay the full years premium anyway so may as well leave it in place. I also explained that in the event of being out of work I would be able to cover my mortgage payments and didn’t need the policy – but on each occasion was persuaded to keep it in place.So for 4.5 years I was a self-employed contractor (on 6 month renewable contracts) and have now recently become an ’employee’ with a company but on a 12 month fixed term. I decided now that I really dont need to keep paying the premiums as I just feel that when it came to make a claim there would be some loophole that would mean I wouldnt be able to claim plus I could cover my mortgage. So I have now cancelled my policy (after at least 15-20 minutes on the phone with a very vague young man who did not seem at all sure of whether I would be covered or not – referred to his team leader – came back and said he thought I would be covered and again tried his best to persuade me to keep the cover in place) He advised that if i was given notice within the 6 month contract i would be able to claim for the remaining term of the contract after ceasing trading with hmrc etc but that if i was unable to find my next contract after the 6 months – I would not be covered for this – which really is no good to me. After cancelling I asked regarding claiming back my PPI as i feel that the advice we were given by the broker that we had to take it and the subsequant phone calls trying to cancel the policy due to my change in circumstances – mean that we shouldnt have actually taken the policy out in the first place and then were persuaded to keep it in place despite telling them I didnt need the policy. Paymentshield said that I cannot make a claim directly to them as we were sold the policy by a broker – who is now no longer trading. There is no information on their website on how to go about making a claim in this circumstance and the customer services representative had no information other than to tell me the brokers name and phone number (not much help). How would I persue a claim in this instance – where would I send it? and is it a very arduous process due to the broker no longer trading? Hope you can advise

Henry says:
14 March 2013

Try the FSCS or a good CMC


Hi how have you got on with this as my broker has gone out of business


Hi Karen, as ever all insurance company’s are very pleased to take money from you, but when it comes to paying out or refunding is another matter. In my similar situation, I stopped paying the extra on my mortgage. I did a quick calculation making payment for my mortgage only, by altering the amount of my Direct Debit via the bank. At the same time I transferred my mortgage to my present bank, who took care of the details. I received several letters from the broker and my previous bank, all asking me to pay the difference, which I naturally refused. I was not defaulting on my mortgage payment, and a court ruled in my favour It is your money and you are entitled to spend it in whatever way you wish..

PPIed off says:
7 January 2013

Hi I have in the last 2 years been through the self claim route. Was rejected on 2 out of 3 claims, got an offer which was low. I have been through the PPI claims with the Nationwide and Capital One. and then to the FOS who seem to side with the financial institutions and then I appealed to the Ombudsman. I used FOS technical notes which confirmed my eligibility. Have been rejected by the Ombudsman not convinced whether they took note of my points. Even though they acknowledged it was not clear nor explained to me. I am determined to reclaim what is owed as I would have never signed up for PPI as statements such as “peace of mind” etc are going to to persuade you. What is my next step- lawyers and court!

Gary says:
15 January 2013

I took a Mortgage protection Insurance from ABBEY NATIONAL LIFE INSURANCE when applying for an extension on my mortgage in 2002 when I was told that the mortgage would only be authorised with the addition of this policy. The policy was cancelled in 2010 but I now believe this to have been mis-sold. The policy was later passed on by Abbey National to ‘ROYAL LONDON MUTUAL’. I have applied to Abbey National (Now Santander) for compensation and have been turned down. They say there is no record of a policy being sold, despite the fact that I have numerous Bank Statements which clearly shows a reference/policy number & monthly payments to ‘Abbey National Life’ for £28.86 per month. What should I do ? Am I right in applying to Abbey National who held this policy for the larger part of the length of policy or should I be applying to ROYAL LONDON instead.

Mairi says:
1 September 2013

Hi, I am in a similar situation with Abbey national life which was sold to Royal London can you tell me how you got on? many thanks.

Dawn says:
19 January 2013

We are trying to make a claim through Yorkshire bank for mis sold pip. We have both phoned and written and received a number of responses:
The time difference is not a big issue ( the loan was around 2000/2001)
They can’t find any records as its longer than 7 years ago, we have provided account numbers
Our claim is being investigated and they will respond in 4 weeks

So, we’re very unclear!

What do you suggest we do, I do to want to sit tight for 4 weeks, as I’m not sure what response to listen to.