If you have recently realised that you’re a victim of the infamous payment protection insurance (PPI) scandal then chances are that you’ve come online for some advice and guidance on the topic. If you have done a bit of research, you’ll know that there are two ways for you to make a claim: you can file the claim yourself, or you can go through a claims company.
Although, if you have done further research then you’ve probably found out that many consumers hold claims companies in a bad light. In other words, these companies seem to have a bad reputation.
Throughout the next few sections we’re going to explain why claims management companies have received a bad name. We’re also going to tell you how you separate the legitimate companies from the “rogue” companies.
Some companies have received a bad reputation because of their fee structure. Companies have a lot of flexibility when it comes to setting fees, so you’ll find that there can be a lot of variety here.
Ultimately, a claims company should charge you a reasonable fee for their services — this should be anywhere between 10% to 25%. After just a few minutes of research online, it wouldn’t be difficult to come across a company trying to charge you almost double the reasonable rate.
Companies have also received a bad reputation for the fact that they ask for upfront fees. Do keep in mind however, this isn’t a practice that goes on regularly. It’s usually only the “rogue” companies that will ask you for any money upfront.
About a decade or so ago—when PPI was just starting to take off, and everyone wanted to receive thousands in compensation—the claims companies wanted to reach the top of their industry as fast as possible (just like everyone else!) and this resulted in some companies operating slightly unethically.
Some claims companies don’t take the time to properly explain the situation to consumer, which can lead to problems if there are certain terms and conditions that the consumer didn’t know about.
It’s safe to say that this is something that doesn’t happen often anymore. You should always have a few questions to ask the claims company and make sure that they spend enough time on your claim if you are concerned.
Companies That Aren’t Regulated
When the PPI claims industry was at its peak, you would have found many companies operating without being properly regulated. This gave a very bad name to the industry overall. Companies that aren’t regulated don’t have to comply with strict standards set by the regulatory body (the Ministry of Justice).
Before you make a commitment to a claims company, also ensure that they are regulated with the Ministry of Justice and also ensure that they are a member of a professional body such as the Law Society of England and Wales.
There are quite a few reasons why the majority of consumers stay away from claims companies, but to be completely honest they’re not all as bad as they seem. There are some very legitimate claims companies in the industry, you just need to make sure that you only deal with the companies that are regulated and have a good reputation.
To conclude, when dealing with claims companies always make sure that they have the following three attributes: the fees should be reasonable, the company should explain everything to you clearly, the company should be regulated and also be a member of a professional body.