/ Money

Why not make banks foot the bill for claims firms’ fees?


Proposals to cap claims management companies’ fees are on their way, but is the Government missing a trick here? Why not make the banks pay for the cost of claiming?

CMCs are the ones that contact you to tell you you’re due a PPI refund, or ask you if you’ve ever had a packaged bank account. Often a major source of nuisance calls, for some they can be a real pain.

But for others, these firms can help identify where compensation is owed and make claiming quicker and easier, even if in reality there is very little work that needs doing. The problem, however, is the extortionate fees they charge.

Well, there have been some interesting recent developments from the Government to tackle the behaviour of CMCs. But we’re wondering if the Government could be missing a trick here…

Missed a trick

There are plans to introduce a cap on the fees that CMCs can charge people. And when CMCs charge up to 40% of your payout, for what might be a small amount of work to progress a claim, no wonder people are left feeling ripped off.

The argument is that by introducing a cap, claimants keep more of the money they are owed and walk away with a better result.

But surely claimants wouldn’t feel the need to use a CMC in the first place if firms were much better at helping customers access the compensation they’re entitled to in the first place?

Better conduct, better customer service

That’s why we’re calling for the Government to take action on financial firms’ conduct in the upcoming Queen’s Speech. We’re asking the Government to announce new legislation to make financial firms responsible for paying the costs of CMCs when they’re at fault.

The way we see it is that if firms themselves have to cover the costs of CMCs when they’re at fault, then they’ll have a clear incentive to make sure as few people as possible pursue claims through CMCs. It would encourage firms to be more proactive in identifying and contacting mis-sold customers, for example, and do more to help them get their money back – possibly even making the redress payment automatically. Obviously, consumers will benefit as they’ll keep more of the compensation they’re owed, and CMCs offering little value should be squeezed out of the market – meaning less nuisance calls.

So what do you think? Should banks have to pay the costs of CMCs who claim successfully on behalf of consumers?

Do financial firms need to do more to help people with claims?

Yes (91%, 758 Votes)

Don't know (6%, 53 Votes)

No (2%, 18 Votes)

Total Voters: 829

Loading ... Loading ...

Less nuisance calls? The Queen’s Speech? The mind boggles.

Which? are still not listening to the thousands of people who want nuisance calls to stop.

We have no way of knowing if a CMC calling out of the blue is genuine and no-one should enter into any financial transaction unless they instigate it. These ‘companies’ can ask for money to proceed with a claim and victims could find themselves seriously scammed and poorer if they give their bank details.

Making financial companies pay for CMCs if customers have no other choice is a good thing as is capping the percentage the CMCs can take. But customers should find their own CMCs and never accept help from nuisance callers.


Thanks for your comment Alfa. CMCs are a major source of nuisance calls and reports to the ICO show that reports about nuisance calls from PPI and accident claims make up a third of all complaints. Therefore if firms were much better at helping customers in the first place, the number of nuisance calls we all get from CMCs will reduce. We also want to see Directors of CMCs who make unwanted calls held directly responsible for their firms actions. There is still lots more to do to tackle nuisance calls, but holding directors to account we think will make a difference to this everyday menace.


Sorry Jack, but I am getting a bit fed up of the company line of ‘less’ nuisance calls and holding directors to account.

There have been thousands of experiences shared on Which? of how nuisance calls are ruining peoples lives, scams where people are being conned into parting with their hard-earned money.

When PPI has run its course, VW claims and goodness knows what else will rear their ugly heads and we will subjected to new scams. We are never going to get ‘less’ nuisance CMC calls.

When is Which? going to start listening and send nuisance phone callers the same way as nuisance doorstep callers and call for an outright ban?


Jack – You are right that CMCs are a major source of nuisance calls. Alfa has produced a long list of Conversations that refer to nuisance calls and has had a long running campaign to stop them. I was very supportive but it is time for Which? to press for action that will put an end to these calls. For some time I have been suggesting that companies that make nuisance calls should have their telephone service withdrawn for increasing periods until they learn their lesson. Furthermore, I suggest that this happens promptly rather than waiting for hundreds of thousands of nuisance calls.

To the best of my knowledge, Which? has not even pushed for marketing calls to be opt-in rather than opt-out via the TPS.

Apologies for this rather aggressive post, Jack, but if you look back at the many Convos I hope you will see that the current approach in dealing with the problem is not good enough.


Do financial firms need to do more to help people with their claims? YES. Should banks have to pay CMC costs? NO.
This would just open the door to more CMCs pestering us for business instead of us being encouraged to do the claim ourselves. So more big fees for very little, siphoned off into a parasitic company.

Surely the best way is simply to publicise a mis-selling, to have banks (or anyone else) contact directly all those genuinely affected with a simple claim form and have them repay quickly. Make this law. As far as I am concerned the final objective should not be to distribute compensation but to make it not worthwhile for predatory institutions to mis-sell products in the first place. Better to have prevention than a sticking plaster.?


In a perfect world CMCs would not exist, but they do. Also in a perfect world financial companies would say sorry here is your money back but they don’t. So in the meantime I suppose we need a sticking plaster.

Some companies already inform customers they are due a refund as I was sent a claim form by one, so they are not all bad.

Stopping CMCs calling us in the first place would be a big step but the powers-that-be are not listening to us.


Hi Malcolm, I think you’re right – in the case of mis-selling like PPI, a proactive approach from banks is clearly the better option – requiring firms to contact all those affected (for they should know this!) and actually pay them automatically. The challenge comes with other issues, where a complaints-led approach is used – and not just in financial services – for example you have a complaint about how you were treated. In those cases, how do you incentivise firms to make it easier to claim from them directly? At the moment, firms arguably make it difficult in order put people off complaining and minimise what they pay out. This can drive people to use CMCs. So – one way to make banks help people claim directly would be to require them to pay CMCs costs should an individual use them.


I see CMC’s as a bit like No Win No Fee “layers” who only take on cases they are virtually sure of winning and then scoop a chunk of the proceeds that, otherwise, might have gone to the injured party. Isn’t legal protection insurance a better solution here – granted they still only allow claims to proceed that are likely to be successful, but for anyone that seems sensible.

Perhaps we could have an insurance that deals with making complaints (that involve a financial reward) instead of commission-based companies? As for the banks paying the CMCs, remember it is not the bank’s money being used, in the end it is ours – whether depositors or borrowers (interest) or shareholders (stock value and dividends – remember these don’t mainly go to capitalists but fund most of our pensions). We’ll pay one way or another. So we need to keep the costs as low as possible.