Claims management company checklist 

Income protection & PPI

Claims management company checklist 

By Dean Sobers

Article 2 of 2

Put us to the test

Our Test Labs compare features and prices on a range of products. Try Which? to unlock our reviews. You'll instantly be able to compare our test scores, so you can make sure you don't get stuck with a Don't Buy.

Claims management company checklist 

Eight key points you need to consider before using a claims handling company.

What is our view on claims handling companies?

If you have a complaint against a financial services company, there is no need to spend money employing a claims handler. There are already simple processes in place for resolving complaints - you can use these without the help of a claims company and the high upfront fees they often charge.

Is there anything you should be aware of if you do opt to use a claims handling company?

You should make sure the claims handling company is registered with the Ministry of Justice which you can check at www.claimsregulation.gov.uk/search.aspx.

You should also be aware that while some companies will reimburse your fees if the claim is unsuccessful (no win – no fee), not all will. Take care to check for this in the fee description.    

In short, you should be wary of any company that doesn’t qualify its claims and make it clear that the success of any attempt to write off your debt is entirely dependent on your situation.

In particular, you should be sceptical of those that point to a 100% or even 70-80% success rates, and should be aware that they are likely to demand upfront fees in excess of £300.

Are there any particular claims handling companies consumers should look out for?

The MOJ has also suspended and cancelled the licences of a number of firms that should be avoided. You can find the full list on the claims regulation website here

Is it true that people can get their debt written off due to a legal technicality?

In some cases we understand the courts have ruled that credit agreements are unenforceable because of problems with the terms and conditions. However, this isn’t necessarily true of most credit agreements, so consumers should not see it as an opportunity to write off their debts.

Which bit of regulation allows this?

These claims are being made under specific provisions of the Consumer Credit Act 1974.

This is good news for thousands of consumers, isn’t it?

Some people will see this as an easy way out of debt, but we don’t think consumers should use a technicality to get out of repaying money that they have been loaned in good faith. There is an onus on lenders to lend responsibly, but borrowers should deal with their debt in a responsible manner, too.

Banks and credit card companies have been ripping us off for years – isn’t this a good chance for a bit of payback?

If people feel they have been mistreated by a financial institution, they should take their specific grievance to that institution. If they're not satisfied with the firm’s response, they should go to the Financial Ombudsman, which is a free service.

What does Which? advise people who are struggling with debt to do?

If you're struggling to meet your financial obligations, the first thing you should do is contact your credit card company or lender. It is in their interest to help you restructure your repayments. If you still find yourself unable to cope, contact one of the debt advice agencies, such as Citizen’s Advice, National Debtline or the Consumer Credit Counselling Service.

Have you used a claims management company?

If you have used a claims management company to get PPI redress, tell us about your experiences at  news@which.co.uk.