A survey carried out by Which? and MoneySavingExpert.com has found one in four consumers are unaware that claims management companies take a fee for reclaiming mis-sold payment protection insurance.
The research comes as Which? and MoneySavingExpert.com launch a campaign to increase awareness of how easy it is for consumers to reclaim mis-sold PPI for free.
They have launched the campaign in a bid to tackle head on those unscrupulous claims management companies who exploit consumers wanting to claim back their money.
A survey of over 2,000 people found:
- A quarter of people – 25%, did not know that claims management companies take a fee – usually 25% plus VAT, and only half of people, 49%, knew that using a CMC would be no more successful than making the claim themselves.
- Just over a quarter of people said that the main reason that they would use a CMC, if they were to make a claim in the future, is that they would not know how to make a claim themselves.
- Over half of people, 53% who have used a CMC to get back mis-sold PPI said they’d be unlikely to use one again. The biggest complaint was about value for money, with 37% of consumers unhappy on this front.
- A huge 93% had seen or heard adverts about claiming back PPI, with 88% of people seeing television adverts.
- Some 65% of people said they’d received phone calls from CMCs about PPI, 55% had received text messages, 54% had received letters.
- One in ten – 12%, of those surveyed were themselves, or knew someone, still waiting to get back their mis-sold PPI.
The findings come ahead of today’s major PPI Summit with all the major banks and credit card providers, regulators and the Financial Ombudsman Service.
The aim is to get all parties working together to help people get back the money they are owed and help to improve the PPI claims process. A separate meeting with representatives of claims management companies will follow.
A radio advertising campaign will also be launched to raise public awareness of this issue.
MoneySavingExpert.com’s Martin Lewis says: “Sadly PPI has become a cash bonanza for unscrupulous claims companies, who through a series of lies and misdirection are persuading people they are the only option for getting their PPI money back. Even I’ve been texted to be told I’m owed £3,000 PPI – though I’ve never had the product.
“If people make a rational decision to give a huge 30% of what they’re due to a claims handling company in full knowledge they could do it themselves – I’ve no problem. Yet sadly very few are in that position. Many are persuaded under false pretences and the dire lack of regulation means it’s tough to tell legit firms from the rest.
“And worse, if things do go wrong with claims companies, it’s a nightmare to get any redress. This is a billion pound plus industry – it’s too big to be left alone.”