/ Money

Letter to the justice secretary – clean up claims companies

Three hands signing

We’ve written to justice secretary Kenneth Clarke. We’re challenging the government to tackle the claims handling industry – the companies who act on your behalf to manage claims such as PPI mis-selling.

The letter was co-signed by MoneySavingExpert.com founder Martin Lewis, chief executive of the British Bankers’ Association, Angela Knight, and Which? chief executive, Peter Vicary-Smith. We’re also requesting a meeting with Mr Clarke to discuss this issue further. Here’s what was said:

‘At a recent meeting senior representatives of MoneySavingExpert.com, Which?, financial services providers and the Financial Services Ombudsman discussed ways of improving confidence in the Payment Protection Insurance complaints system. This is a large scale issue, with almost £9 billion provisioned by institutions and affecting millions of consumers.

We agreed that more needs to be done to help those who have been mis-sold PPI, and together have committed to further action. However, we also believe the government has a critical role to play, to help consumers and the industry, by ensuring third party complaint handlers are properly regulated and bad practice is stamped out. Whilst we acknowledge the recent steps taken by the Ministry of Justice in this area, we believe further action is urgently needed.

There is significant evidence of rule breaking within the claims management sector, an industry that has grown significantly, and we believe that regulation and supervision of it has not kept up. Recent research from MoneySavingExpert.com and Which? found that a quarter of people did not know that CMCs take a fee, and only half knew that using a CMC would be no more successful than making the claim themselves. The result is that consumers are losing out now and will continue to do so unless action is taken.

Misleading advice, unfair contract terms and a lack of transparency about fees are all too common and there is very little consumers can do to gain redress when they occur.

It is likely that the bulk of the money being set aside for PPI redress will be distributed over the next year, so it is essential that urgent action is taken to encourage better supervision, self-regulation, tighter regulation and enforcement action against CMCs by the Ministry of Justice.

We are also concerned that the proposed consultation by the claims management regulator on the Conduct of Authorised Persons Rules is being delayed. Any delay in bringing forward much needed changes to help drive out the poor practice of some CMCs will only lead to further consumer detriment and additional costs across industry and the Financial Ombudsman Service.’

If we get the chance to meet Mr Clarke – and we’ll be pushing to ensure that we do – what would you like us to add to the agenda to ensure your views are heard? How do you think the badly behaved claims management companies should be dealt with?

Comments
Profile photo of william
Member

I dont understand why someone can’t just tell the banks to refund money to everyone they “ripped off”. They must know who was mis sold and how much otherwise how could they set aside all that money.

I’m even more amazed the Government haven’t set up their own claims company as a way of making a little extra money.

Member
Rosie says:
15 May 2012

Having worked in financial services as a qualified – through lots of study and experience – “insurance professional ” (not many of us around!!), there’s a lot I could say on this. If this is to be specifically related to the claims management companies (and not the insurers) then I’d start with them being banned from making “cold call” phone calls and sending text messages touting for business.
Of course, they’ve obtained our contact details from somewhere and it’s clear that several major financial services organisations at least are, when they sell on credit card and loan debts to other companies, then passing on those people’s details as “leads” to claims management companies. This practice needs to be stopped immediately. (It’s the same as what used to be reputable motor insurance companies selling on leads from accident details to accident claims companies!).
The financial services industry used to be reputable, respected, and people were happy to take properly qualified financial advisors’ advice. Now insurance is about profit, not risk, and the public can’t be expected to take out insurance, pensions or anything else whilst the industry is in such a mess, with so few managers and employees who actually have any technical knowledge, or business morals!

Member
David Smith says:
17 May 2012

This may sound pretty stupid but, not having kept satements from years ago, I really dont know if I was mis-sold insurance by my Bank. If I write to ask them if they did sell me insurance, are they obliged to tell me the truth. Failing that what else can I do? Can anyone advise me, please?

Profile photo of Patrick Steen
Member

Hi David, we’ve got lots of advice here and you can use our PPI claim-back tool: http://www.which.co.uk/campaigns/personal-finance/the-ppi-campaign/claim-back/

Sure, your bank should be able to tell you if you had PPI.

Member
Linda says:
17 May 2012

I used the WHICH PPI claim, as yet I am still waiting on any reply. Its been two weeks and nothing. Alliance and Leicester was my bank now owned by Santander. I know I only have a few hundred pounds to claim but money is money. What happens if they refuse to pay back? Where do I go from there?

Profile photo of Charlotte Fitzgerald
Member

Hi Linda – your PPI provider has up to eight weeks to respond to your complaint. If you don’t hear anything by the end of the eight weeks, or if your complaint is rejected, you can take your case to the Financial Ombudsman Service who will investigate your claim.

Member
Linda says:
17 May 2012

Thankyou for the advice Charlotte

Member
Brian says:
18 May 2012

This whole business of selling on data has got out of hand. I received a text message
from one of these sharks telling me that they have reviewed my “accident” and I could make a claim. I haven’t had an accident.! They got a very brief return message.
It seems to me that we have yet another quango failure letting down the people of this country. Thank you WHICH? for looking after our interests!

Profile photo of RussellR
Member

Brian – if you haven’t had an accident, where is the selling on of data in your case? The companies just send out texts and email to random groups of numbers and emails in the hope that someone will take up their offer (for a fee of course). The worst thing any recipient of a message should do is reply in any way – that just confirms that they have a live contact which can be sent more spam!! Just delete the message and get on with life 🙂

Member
David Soutter says:
18 May 2012

I was appalled at the fact that Which who are supposed to be the consumers champion agreed to co sign a letter concerning the administration of PPI claims with that failed Tory MP Angela Knight, described as the Chief Executive of the British Banking Association. Just over 20 months ago this woman was leading the charge of the banks fighting to prevent the FSA allowing consumers to go further back in re claiming PPI.

How could Which be so stupid as to agree to co sign this letter? Are they getting something from the banks………..selling or promoting their products……nothing else could explain this ridiculous action.

A for Martin Lewis…….well it says it all. His site promotes best buys but does he or his site earn from the recommendations the click through links on these products.

These so called consumer champions should hold their heads in shame.

Member
Mick K says:
18 May 2012

I too am disapointed that Which and Martin Lewis have cosied up with anybody from the Banks or the Banking World, I honestly wish that people would stop saying that these products, PPI and the like, were missold. I truely believe that these products were knowingly sold as an additional way of making money by the agents who sold them and that these agents were encouraged by the firms, the Banks and other financial institutes, they worked for. I know that it cannot be an accident that millions of customers paid billions of pounds to Banks etcetra for what, in most cases is either worthless or does not provide the cover that it supposed to. I would consider it theft and I feel that all the senior executives who were in charge and some who still are should be facing time in jail after they have been stripped of all their assets. I could go on but nothing will happen as too many wheels have been greased, at the most it will be slapped wrist and don’t do it again or at least don’t get caught.

Profile photo of philthunder
Member

How about doing something about the cold calling PPI claims specialists ! They are worse than the banks.

Profile photo of Charlotte Fitzgerald
Member

Thanks for your comments. We’ve given the banks a good grilling over the years on PPI (among other things!). Following the judicial review last year we issued a public letter to the British Bankers’ Association urging the banks not to appeal the court’s decision. The banks dropped the appeal (full news story here – http://www.which.co.uk/news/2011/05/banks-drop-ppi-appeal–252945/) and since this point, we’ve been proactively working with individual lenders, the BBA and regulators to ensure people get their well over-due compensation.

You’ll see from our comments on the number of complaints the Financial Ombudsman has received in relation to PPI mis-selling http://www.which.co.uk/news/2012/05/financial-complaints-rocket-in-2011-and-2012-286692/ that we’re not prepared to let the banks off the hook. Equally, we need to work with them to ensure that they are dealing with complaints as a matter of urgency.

We’re really keen to ensure that people know that they can reclaim mis-sold PPI themselves for free. Which? and MoneySavingExpert.com have facilitated this process for many over the years and we decided to join together on this project to increase awareness. People can either use the free tools and letters available on the Which? website or use the templates on MoneySavingExpert.com. The important thing is that people are equipped with the means for challenging the banks themselves.

Profile photo of desmond
Member

Does anyone know if i can make a ppi claim against a bank or credit card company when the accounts are subject to a bankcruptcy order. This is dating back to 2007.

Profile photo of desmond
Member

I declared myself bankrupt in 2007, and would like to know if i could make a ppi claim against my previous bank and credit card companies. does anyone know if i could.

Member
Shahid Jamal says:
6 June 2012

Thanks which, for your help last year with my ppi, my bank were taking so long to refund the monies, Alliance and Leicster (Santandar) i had to get help from the Ombudsman, who are still fighting for me, its been 1 year, i have given them all the paperwork, from the past so many years while i had the mortgage for 20 years, I think its a real disgrace!! that they should take so long!! they have been taking my monies for the past 20 years!! but when its time to pay back they just dont want to part with my monies!! I think the government should step in and help us with these banks.

Member
Linda says:
7 June 2012

Oh no Shahid same company I dealt with though my loan was only for 5 years, I do hope they dont take so long with my claim. I know from friend in Germany he banked with Santander there, and there were many complaints about this bank, not with the PPI but in general