/ Money

Claims management companies come with two big catches…

Man stuck in a jar

Picture the scene; you get a call, telling you that you may be entitled to a refund for a product you know nothing about and didn’t even know you had – Payment Protection Insurance (PPI).

So what’s the catch? Well, you’ll be charged. But hey, it’s no win no fee, so if they don’t get your money they don’t get anything either. Or, they charge you a small amount, but again, it’s fully refundable if they can’t get it back.

Sounds fair enough. After all, you might not know anything about drains, so when the sink’s flooding you call a plumber. Or if you’re having trouble with ghosts, who you gonna call? Unfortunately the devil’s in the detail, and there are two key points that you have to consider:

1) The companies that claim to help you reclaim PPI aren’t playing by the rules.
2) It’s as easy as it can possibly be for you to claim yourself.

1. The companies aren’t playing by the rules

Our investigation found a huge range of problems with claims management companies. Firstly, there are the fees. Consumers are owed around £7.4bn by the banks, but these companies typically charge around 30% after VAT. So, with the average individual PPI compensation award from the Ombudsman coming to £2,750 we’re talking about the average consumer paying £825.

But there are also problems around what they define as ‘compensation’, and consequently what you get back. You might think they mean money you’ve paid and are being compensated for. Wrong.

Some firms include a reduction in future loan repayments as part of the compensation, so what you would have paid in future, and only a portion of it will be cash you’ll receive.

There were also issues around transparency. Because there’s a free service in the form of the Financial Ombudsman Service (FOS), CMCs have to make you aware of it – but two-thirds of the companies we spoke to didn’t. They’re also not allowed to suggest you’d have a higher chance of success, or get more back, using them instead – again six of the 25 we spoke to did.

What’s more, some of them charge money upfront, locking you in before you consider your options, and others call you up out of the blue offering to process a claim on your behalf. We’ve heard of people who didn’t even have PPI agreeing to let these companies look into their ‘claim’ and then being billed.

2. Unsure if you have a claim? Look into it yourself

Here’s the key – if you’ve been mis-sold PPI and you’re owed that money back, it’s yours, and you shouldn’t have to give up a portion to someone else. You might be uncomfortable dealing with your bank directly, but there’s loads of independent help available, and if you run into trouble there’s FOS – a free independent mediator – who will look into any dispute.

Finally, after years of fighting, the banks have given in and are now required to deal with your complaint according to prescribed guidelines. It’s not an exaggeration to say that – for an issue as complex as this – it could not be easier for you to claim yourself.

Comments

Hi All,
Myself and my ex wife had a call a few moths ago from a ppi reclaim company stating that they could go back many years to find loans and cards that had ppi on them, their charges was 39% a little steep but being as though we didn’t know if we had any we agreed, a few months later we had some offers from some of the banks, we accepted the offers and received our bill from the ppi reclaim company, as well as the 39% we also had vat and tax included in the bill, by the time we had paid everything we hardly had anything left.
Is it right that they take out VAT and tax?
Just seems a lot to me.
Dave

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JAYDEN LEE says:
2 March 2017

terrible experience
Just made a call to the moneyback PPI on the phone what a rude lady answered no mannar at all she put the phone down while I was talking, Just be aware of the rude staff at Moneyback PPI

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a company who called me advised I was owed £1.62 and asked me to sign a letter of authority which I declined.. They have now sent me an invoice for £282.00 which they say is reasonable for 5 hours work @ £50 per hour plus vat…is this legal..they won’t send a copy of a signed agreement

Take care, Maeve. This looks like a fraudulent attempt to get hold of money to which they are not entitled. Unless they can produce a contractual document signed by you to set out what they would do for the money, and you are satisfied that they have done it, you should ignore this, but save any paperwork and records of phone calls [try to capture any numbers if possible]. If there any threats or intimidation inform the police.

Julian Harvey says:
10 November 2017

How long does a contract with these claim companies last, IE is it 6 months, 12 months or untill the bank pay up ?

I have already been paid by the ombudsman but HYC are demanding I pay them. Do I have to pay them as well?

I am in dispute with a CMC . For several reasons. 1. Misrepresentation, I believe, as I have only had loans and financial products from Lloyds. Lloyds NEVER speak with CMC’s and have confirmed this in writing to me. I believe the CMC would have known this at the outset as I cannot be the only Lloyds customer they have had and they certainly knew Lloyds paid the client direct. I therefore feel I was mislead. 2. Breach of Terms and Conditions and implied Terms and Conditions, I understood they would do Everything and they didn’t they did not respond to calls and queries I had and I had to use FOS myself to dispute my claim with Lloyds. I also had to deal with Lloyds directly myself. 3. I have just read on hear that CMC’s have to inform you that there is a free service with FOS they never did this, I have the telephone transcript. They told be I could do it myself, but they never told me FOS would do this for me. I really feel conned and misled . The only time they contacted me after sending off the forms, was after I had done all the hard work and negotiations with Lloyds and the CMC wanted their fee. Legal Ombudsman says I am better to raise a counter claim as they would probably find in their favour anyway Out bloomin rageous.

Hello, I used a company to claim PPI on my behalf
They were successful and I have had a lot of money back (£30k)
When I did this I took the charges as normal but now with all the hype it says to do it yourself
The company I used charged 35% and then 20% vat so it took a big junk of what I got awarded
Yes I signed for it and went along with it, but wanted to know if I could claim any of the money back from them or whether I just have to accept the charges
Any response would be great

Wendy Green says:
17 February 2018

I have a problem I am 73 and have a claim going through, and unbeknown to me I also have the same claim with another company. I am so worried, and also this morning I received a letter from the bank telling me how much PPI I have and to sign a form and they will send me a chque. I do not know what to do.

Hi my Wife signed authority for Claimeazy to act on PPI. She has previously had debt issues but in March 2017 made payments in agreed amounts to her creditors in settlement of her debts. She was approached by Claimeazy in November 2017. Now Capital One have offered PPI compensation of £350 but said they will take this sum to cover part of the debt that they weren’t ever going to collect. We have written a complaint to Capital 1 saying that this action puts my wife in a worse position than if she had not made a payment in settlement. In the meantime though Claimeazy want their commission for the “successful PPI claim”. We are resisting on the basis that the contract refers to redress achieved and that my wife has not actually received any personal financial benefit because the claim has been set against a sum that she would ever have to have paid. Are we on strong grounds here?

No is my untutored opinion. Your relationship with Claimeazy is not relevant to Capital One.

If your wife had claimed directly after having agreed and paid a settlement figure with Capital One it would seem that CapitalOne , if they paid would be in a worse position. I am guessing that possibly the settlement agreement had clauses that covered subsequent claims either way. I assume you have a copy which could be scanned [clauses not personal information] and loaded up here.

It would be quite educational to take apart the clauses for people’s amusement.

Of course I could be wrong and Citizens Advice might have this on their knowledge base for a speedy answer.

It seems to me that if you have outstanding debts they should be repaaid, unless you have a statement that they have been written off. Receiving a “windfall” does not entitle you to keep it if you owe money to the person where the windfall originated. Just my opinion.

If you engage a CMC and, for example, Lloyds Bank finds in your favour and issues you an offer, which you accept, and then the Bank repays you direct, how does the CMC determine their % fee if the Bank doesn’t communicate with them? Do they have to rely on the claimant, their client, telling the CMC how much they have been refunded and can this disclosure be forced from the claimant?

Used a company called The Fair Trade Practice !!!
They advised a credit card had offered me some compensation and they had also found another credit card.. i had not told them about, I was rushed to sign some paper work as i was going on holiday and kept getting calls and text’s whilst away. Paper work signed i cant remember what i signed (bad on my part i know). However cut a long story short there was an outstanding debt to be taken back first before getting a payout so i got a lot less….. But the FTP want there commission from the offer amount not what i actually revived this is wrong !!!! Surely they should have there cut from what you receive not the offer……Please could someone HELP or advise me…as i don’t have the funds to the amount they want.

If the credit card provider gave you compensation down to the efforts of FTP then their commission is due on the compensation they achieved for you.. The outstanding debt is nothing to do with them. You presumably are still better off with the compensation than without it.

I suspect these companies are sent ppi compensation by the catalogue companies and don’t tell people immediately it goes to their bank after a month you get told they have received it and it will take 5days to clear the n instead of bank transfer they issue you a cheque another 7days all kinds of excuses are told you about delay they really are using a free loan to make money as if they don’t charge enough it’s sharp practise to say the least at least the banks send the money to you and you reimburse the company is it legal?

Helpful Claims Management Company Called my Partner Last week saying that she had a PPI claim, she signed the agreement and paid the agreed amount, since then they have come back and asked for more Money For “different fees” which she has paid, she got a letter from them on 19/06/18 stating that one more payment was required then all the claim money and refundable costs would be sent out, this was done and confirmed by them, they have now stated there is another charge but we have refused to pay this as we have the document from them, they are now ignoring us and have still yet to pay. can anyone please advise

Report to the police as a scam.

They have now said that the money did not clear till the next day so now there is another Bank transfer fee and holding charge, they keep threatening to cancel the claim and we will loose all money we have paid.

i need a lawyer who can work on no win no fee as i dont have any money to give them now

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Many Thanks For That

i just need advice on how to take this can anyone help they are calling constantly

John, did you contact them or did they call you out of the blue?

Do you really think any genuine company would keep asking you for money?

Do you know for sure you are owed PPI and who with?

Did you know you can claim PPI yourself for free?

Do you honestly think this is genuine? If this was for real, don’t you think they would take their fees from the amount collected before handing over the remainder.

Just think about it before you start paying lawyers.

Thanks

They contacted my partner

we have not checked about PPI for her as yet but the claim is for a company that she has used and has delings with for years

You can get free advice (1/2 hour I think) from certain solicitors. I suggest you start there but I regret to say you have probably been scammed.

I get many phone calls offering to claim back the PPI I am owed. I know for a fact that I am owed absolutely nothing. It doesn’t stop them telling me I wouldn’t have know about it or it would have been in part of interest added and other absurd reasons.

These companies and/or scammers are fishing as they don’t know whether you are owed money. They want all your financial details either to check them out to see if they can find PPI or they could be scammers after your financial records. If it is the latter, then you need to take steps to protect your accounts.

Just because you have had dealings with a company for years, doesn’t mean they owe you PPI. If they do, then claim it yourselves, don’t pay someone at least 40% to claim it for you.

Thank you all

looks like i need to take this Legal and report it as Fraud.

They are still contacting me via email. they are registered on Companies House the owner owns three different companies that i can see, and also registered on the ministry of justice

Sylvia says:
29 July 2018

A PPI company have requested payment of their fee for an alleged refund I am supposed to have received from an old Bank of mine but to date I haven’t received any refund. I made an official complaint with the PPI company saying how can I pay their fee for a service I’ve not received as no refund has arrived and also complained about their harassing and pushy behaviour. They acknowledged my complaint and sent a letter of apology. However today I received a letter from a debt management recovery firm acting on their behalf advising me that if I don’t pay within 7 days I may be charged further interest on non payment. I would simply ignored this threat if it wasn’t for the fact I am currently applying for a mortgage and am worried this might affect my credit score rating. Advice please from anyone. Many thanks

If the PPI compensation claims agent has accepted that you have not received a refund as a result of their involvement then you should as soon as possible request them to call off the debt recovery firm and confirm in writing that you owe them nothing [if all you have received from them so far is an acknowledgment of your complaint]. This is probably the first step by the debt recovery firm and not a final demand before legal proceedings, nevertheless you need to get this threat removed as soon as possible. Nothing can affect your mortgage application at present because there is no court judgment against you, and nor could there be if you have confirmation from the PPI Claims firm that you owe them nothing.

The window of opportunity for PPI claims is starting to close [the deadline is 29 August 2019] so the parasites that are active in trying to get compensation for people – at a percentage commission for something that people can do for nothing themselves – are gearing up for the final push before their money stream dries up and they are likely to be employing aggressive debt recovery firms and also neglecting to stop the recovery process [which is probably semi-automatic] as soon as they are aware there is no debt.

PPI claims firms are regulated by the Claims Management Regulator [a unit of the Ministry of Justice] so in the event of continuing problems you should contact them as soon as possible.

I have also received a letter for legal action against a ppi company saying I have not paid their fee in fact I have never received any monies as they say I have .they say I have never responded to their letters when in fact I have

I to have been having threatening letters IE bailiffs, court case, etc. From bank-smart truro. This has been on going since12-11-12. they looked into me having PPI for a mortgage which they say they could not find.
They sent me letters over the years asking me to sign or they could not carry on. I did not want them to carry on as I had spoken to the building society and they confirmed there was no PPI. Now in 2018 they have sent me a bill 485.59, no mention of any fees before as it was a no win no fee. now they have doubled up the bill with what they say are court costs. I have written to their complaints dep, but have so far heard nothing, but this is not unusual you don’t hear from them for weeks and then they start again.
My husband wants to pay them to get rid of them as he knows it is affecting my health, he thinks it is harassment but does not know what else to do. I am 74 and do not owe anyone money, would go with out
to pay my way. Would you be able to give me any advice, as its on my mind all the time.Thank you Carol.

Hi Carol

From what you’re saying, this sounds like a scam to me.

I do not suggest you pay them anything, as you don’t owe them a penny and it won’t be guaranteed to get rid of them.

For more detailed help, it might be worth trying your local citizens advice. The Which? Legal service might also be able to help you, if you don’t mind paying their fees.

I to am having trouble with bank smart, this has been going on for 8 years, with all the threats that go with it. When will some one look into this company, they have hundreds of complaints about the harassment to innocent people, but no one seems to help, I think that they are afraid they may be sued, as they will do any thing to get your money. I feel I am fighting this company all by my self.

e porter says:
3 March 2019

I have a claims company who want me to pay fees for cancelation they have already got a claim refunded and they have been paid there fees but they still say I owe them money for termination when I have not signed another agreement

MAC says:
11 March 2019

Hi Can anyone advise – I have used a PPI company to investigate any claims – living abroad I have sent information electronically. They asked me to contact Santander to investigate their archives as they did not have any further information and could not confirm any PPI due – Santander advised me they had no cases open for me with the claim company which I called them so I spent an hour on the phone from abroad..at my cost…going through all my details and address’ etc with them direct. Long and short is that I received a payment due to this call – Santander confirmed that the payout was not related to the claim company as they had not received anything from me authorising them to look into my account relating to this payout.

The situation now is – the claim company have a signed LOA from me but did not do the work that got the payment made to me according to Santander. It seems to me that I have done the work and they are now charging me a cancellation fee which is more that the commission they charge on the claim I received.

I have paid the claim company on other payouts which I have not issue doing but in this case I feel they dont deserve it as they didn’t do the work.

My main concern is that the address I use in the UK belongs to a friend so I dont want to risk any bad credit against their address….what will happen if I do not pay? I have advised that I am happy to pay the commission due but they are now insisting that I pay the cancellation invoice.

Any help would be appreciated – really could do without this inconvenience of e mails being sent backwards and forwards with the claim company

Nina says:
15 March 2019

Hi,
I have been awarded 3 small amounts from catalogue companies PPI via Claimeazy. Claimeazy are asking for 35% + VAT but having looked at their T & C’s their charge states 35% for PBA and 20% for PPI. Their FAQ’s state 20% for both PPI and PBA. I queried it with them and after being put on hold for a while, the advisor came back and said that they changed their charges in July 18 and my claims started in June 18. I asked for copies of the forms I signed to be emailed to me, but am still waiting. Does anyone know if they genuinely reduced their charge in July 18 or are they trying to pull the wool over my eyes? Would also point out that they very rarely contact me unless I ask what’s happening (I have another ongoing claim with them). Their response is ‘still waiting’, even though the claim was started 9 months ago and they are supposed to escalate if they haven’t received a reply from the company in question within 8 weeks. Thanks