A Which? undercover investigation has revealed that some claims management companies are discouraging consumers from independently claiming back excessive bank charges or mis-sold payment protection insurance (PPI) premiums.
Researchers who posed as customers interested in making a claim found that almost a third of firms did not meet Which? benchmarks. These reflect Which’s own required standards of service and Ministry of Justice rules.
The Which? study, carried out in August 2009, involved 68 calls to claims management companies. Some 38 of the calls made by researchers were about PPI, and 30 were about bank charges.
Biased reclaiming advice
Only 10 of the 38 companies which researchers asked about passed the Which? test. And 12 of the companies that failed implied their ‘customers’ would be better off using their company than trying to reclaims their premiums independently – even though an independent claim can be lodged for free. This breaks Ministry of Justice rules.
A further 16 firms said that they had successfully claimed back consumers’ money in 90% or more of cases, but did not properly qualify this statement. Five of the companies questioned by Which? researchers could not say how they were regulated.
Bank charges reclaiming
Which?’s researchers found that the advice firms provided about was, on the whole, better.
However, some firms discouraged the researchers from trying to claim on their own. Comments included: ‘You can make the claim yourself, but you will have to wait ‘til maybe next year… [We can do it] straight away.’
One company failed to mention altogether the ongoing bank charges court case.
Claims management companies typically charge a commission of 25% plus VAT if a claim is successful, and may also charge upfront fees.
Best ways to reclaim
Martyn Hocking, Editor of Which? magazine, says: ‘Claims management companies have some very crafty ways to encourage you to use them, from exaggerating their success rates to suggesting they’d be more successful at getting your money back than if you did it yourself.
‘Not only are the firms breaking rules in some of these cases, but making a claim for mis-sold PPI or bank charges is a simple process, and you can do it yourself.’
If you’ve been mis-sold PPI, you can by visiting the . It features a handy checklist that will help anyone who isn’t sure whether they’ve been the victim of mis-selling.
Our also contains everything you need to know about getting back unfair fees.
If you’d like to know more about claims management companies and why Which? is concerned about them, check out our online guide.
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