Should MSE be recommending the ‘best PPI claims handlers?’

Should MSE be recommending the 'best PPI claims handlers?'

Should MSE be recommending the 'best PPI claims handlers?'

Reclaiming payment protection insurance (PPI) has gotten much easier since the banks threw in the towel a month ago and put ¬£6 billion aside to pay out consumers. But claims handling agencies are leaching on top of this, charging 30%+ to process claims most people can EASILY do themselves. We currently have a ‘don’t use ‘em’ stance ‚Äď yet some are using these companies anyway and there are scammers out there ‚Äď so should we tell consumers the least worst and most legitimate?

I’ve been wrestling with this for a long time and would like your views. When the banks put their hands up I thought, as reclaiming would become much easier, claims handlers would go away. But the opposite has happened, they’re on a huge marketing push. For example, one of my team, who has NEVER had PPI received this outrageous text‚Ķ

Wow! Free Message! Important! Our records indicate you may be entitled to £3,750 from mis-sold insurance. To claim reply, Yes"

Of course, everything needed for DIY reclaiming, including template letters, is in our PPI reclaiming and credit card PPI reclaiming guides. There are also other consumer groups, like Which? that offer reclaiming info for free too.

Yet, the claims handlers still have enormous customer numbers perhaps dwarfing even our own, and we’ve had 1.2 million template letters downloaded. But before looking at the options, I want to spell out my stance‚Ķ

  • Is it ever worth using claims handlers?

    There are some exceptions in our view to the ‘never touch them’ rule. If you are functionally illiterate, so that filling out forms is impossible, have mental health issues where the stress may be too much, or have a rare case of pre-2005 non-bank mis-selling, which means it’s not covered by the FSA so you’ll need to go to court ‚Äď then using a claims handler may be your best route.

  • How much do they cost?

    I was shocked at a report by BBC1 Watchdog the other day, which found that many claims handlers charge well over 30% now. So, on a typical £1,500 reclaim this means claims handlers get a huge £500+. This is ludicrous considering a good chunk of people are due to be contacted by their bank to be told they were mis-sold. Plus, many others can reclaim by simply using information on the web and at most it involves going to the free Financial Ombudsman Service.

    Some claims handling firms even charge an upfront fee, which is a complete no-no. If you are going to use a firm, at least make sure it’s on the basis of no win, no fee with a max 25% success fee.

  • There are serious scammers out there

    Not all claims handling firms are dodgy, in my view they’re just often vastly over expensive for what they do. Yet, there are certainly some very bad apples out there and we’ve seen many people duped into handing over money and never receiving a service or a refund.

So do we retain our blanket ban?

The problem is a pretty simple one. We don’t like claims handlers for PPI on the whole, but people do use them and it’s bang in our territory. Some of them are dodgy, so should we be researching or telling people which the cheapest and most legitimate are (of course having first said DONT USE)? Or does that conflict too much with our ‘don’t use them’ stance?

In past brainstorms with my team, before the banks threw in the towel, we did come up with a couple of radical ideas on how to do this ‚Äď I even contemplated calling Which? and mooting a joint project for the following‚Ķ

  • Setting up our own claims handler. If people want it, why not do it for them non-profit, with as low a fee as possible? Though I worry this is too close to being a product provider and I simply don’t have the personal resources to run and manage something this big ‚Äď which is also a wider reputational risk if I put my name to it.
  • Setting up a panel system with redress. We could have a recommended and policed system of providers, (with a price cap on their charges) with dedicated staff spot checking and policing policies. As well as an in-built redress system where we could adjudicate people who haven’t been treated well. To do this though, we’d need to charge the claims handlers a fee to be a member to offset the large costs.

Both of these are pretty radical and a step away from what we do now. A cut down version would be writing a guide on claims handlers and their charges and monitoring feedback on them, although again this doesn’t give any real surety apart from on reputation and cost.

My worry is, that with whichever method we choose, it’d be tough to do without giving the wrong message that we’re pro claims handlers.

I would love your thoughts via the forum or comments links below.

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    • http://www.facebook.com/profile.php?id=677593792 Rhiannon Knowles

      If people aren’t listening to your advice of ‘Dont use em’ why do you think they’d listen to your recommendations to who to use?

      Basically, i think anyone who doesnt listen to the advice you have already given is asking for trouble, and nothing you do will make a difference.

    • Laura Sheppard

      I don’t think MSE should set up a claims handler, or a panel system, as I think it interferes with the ethics of the whole site. You’re very open about the paying links on your site, and state that this does not affect how you reach your decisions, and this is an understandable source of funding. But even if you were being completely altruistic and not making a profit, I think directly charging people for services rendered would destroy the impartiality of the site. However, I don’t see what’s wrong with recommending some, just as you would any other product, especially if you include your warnings in that section.

    • http://twitter.com/MartinLewisMSE Martin S Lewis

      You make a good point.  Yet this stems from the fact that so many people email us and ask questions about their claims handlers and seem to want to use them regardless of what we say.

    • Matthew Topping

      No.¬† You shouldn’t recommend them.¬† The status of MSE as an impartial, best practice guide is too important.¬†

      If you feel a vulnerable few need specialised advice, then do an add on to the existing guide with plenty of caveats.

    • http://www.facebook.com/people/Michael-Ludgate/1560838175 Michael Ludgate

      Agree with Rhiannon over providing ‘Best Worst’ info; With regard to setting up or otherwise putting your name against a reclaim company:

      You’re getting increasingly greater levels of influence, getting ever closer to the¬†coveted¬†’house-hold name’ (no flaming from anyone here who thinks this is already so!). ¬†It’s perverse but an awful lot of peoples minds work like Google page ranking – if their friends know you, you immediately get more influence. ¬†I’d be extremely cautious of risking your name against something that is highly likely to attract negative press. ¬†Even if it’s only administration costs, your placing yourself in a receiving (commercial) position instead of giving (knowledge). ¬†I know you’ve already sited this above, but I feel it’s¬†overwhelmingly important compared to any good it might do.¬†

    • http://www.facebook.com/dominic.hosler Dominic Hosler

      I agree above, your reputation is more important and on a much bigger scale that PPI. It’s the big thing at the moment, but when it dies down next year or the year after your reputation needs to be untarnished so you can tackle the next big financial issue.

      If people are set on using them, and wanting your advice as to which to use, I’d add something like an appendix to your PPI reclaiming guide. Explain all the do not use reasons, but give guidelines as to if they are desperate to use them, what they should look for (and how to avoid scammers).

    • Ashley Timbs

      Seting up your own claims handler would open up a colossal fat of worms.¬† But it would be great to have some sort of approval scheme from MSE because people trust it – that’s a rare commodity in the consumer world.

      But it’s risky for you, of course, and who knows what might happen, there are so so many permutations.

      It’s a risk/reward problem.¬† Perhaps weigh up what risk/reward decisions have been made in the past with MSE and use that to make a judgement.

    • Anonymous

      I fall into the category of “mental health issues” and have been considering for many weeks to use a claim company or try to do it myself – and my position makes a company seem a less threat than my own self! I would vote “YES” please find a way to give a hint as to which companies are safe.

    • claire stott

      absolutely NOT. The advice currently on your website is accurate DO NOT USE. 

      I think any of these PPI companies even the above board ones are still scamming people out of their own money, as none of them are doing it for free! (25% to 30% is the average amount they will take if you are successful)

      One company contacted me and sent out all the forms for me to fill out and attempt to reclaim for me, I had hell of a shock when reading through the paperwork that their “efforts” would cost 30% of any money I got back, eeekkkk!

      I joined this website and get the weekly emails, I read the guide to claiming PPI, the guide is so simple to understand and thorough, the basic letters are provided and all you have to do is put in your own information, I am reclaiming all by myself (not even costing me any stamps, as the customer complaints address to my bank is freepost!)

      That PPI reclaiming company kept contacting me and were not happy that i was doing it myself. When I asked the company what they would do for that 30% that I could not do myself, I could not get a straight answer. The company made ridiculous claims, 100% success rate, of which there is no eveidence to back this up, I was told their claims are looked at as one big group rather than individually so more likely to get more money, which is complete and utter rubbish!

      There are no guarantees to getting your PPI back whatever way you choose to try, so may as well DIY and if you are successful, its your PPI that YOU paid and YOU keep 100% of it.

      Some people will always ignore brilliant advice, so no matter how many emails and phonecalls you get asking about claims handlers, stick to your advice for the last few years, tell everyone to avoid them at all costs and to reclaim themselves.

      People seem to think its too much effort and hard work to reclaim themselves and want others to do it all for them, and this is where the companies jump in to “assist”, yet if people read the guides they would realise it is so simple and using the PPI¬†companies is just laziness. I also don’t know how you would be able to distinguish between good and bad claims handlers.

      As with the selling of PPI which was often about getting commission and making money, the reclaiming of PPI by claims handlers is purely for these companies to get some of your money for themselves!

    • Anonymous

      There are several CMCs that only charge an average of 15% to 20%, so not all are rip off merchants. The Watchdog program was misrepresentative, as it only referred to companies charging 25 to 40%, when there are several on the internet for less than that.
       
      Some claims are easy, but others are not. How do you know your claim is going to be easy – answer is, you don’t hence why use a CMC.
       
      Some banks don’t pay the full redress in line with FSA guidance, and only a good CMC will know this and point this out when they check an offer. If you go it alone, how do you know an offer is correct? Sacrificing 15 to 20% of your refund for peace of mind, is a price many are prepared to make.
       
      Some claims can take a long time, despite of the successful court case, and a good CMC will deal with all the admin and keep you up to date with progress.
       
      Some banks, the FOS and the FSCS issue long questionnaires that some people may be wary of. Indeed, some firms will use the answers to reject PPI claims and a good CMC will be able t guide you on the implications of your answers.
       
      A good CMC will also be able to advise whether a claim has a good chance or not, based on the law and regulations applicable at the time the PPI was sold.
       
      To suggest that ALL PPI claims will result in an easy payout is simply misrepresenting the reality. If banks were sol willing to cough¬† up, why did they mis-sell pensions, investments, mortgages, endowments, insurance etc….and then try to reject millions of claims, then try to overturn rules to avoid paying out?! Why are they still dragging their feet, in spite of the successful court case? Why did they almost bankrupt a nation? Why do they continue to fleece poor people with unfair bank charges? Although some claims will be straightforward, if you think it will be easy, then you are naive!
       
      As you can guess, I represent a CMC. However, we are up front, honest, helpful, professional and only take what we consider to be a fair fee, based on the knowledge and experience we have accumulated over a number of years and taking into account the various costs and investments required to provide such a service.
       
      There are no false advertisements and intrusive email adverts. No up front fees. Refunds are paid direct to clients with our invoice following (many CMCs assign the refund themselves and deduct their fee, but this creates risk for the client and, in our view, is unfair). We are completely No-Win-No-Fee.
       
      We have many happy clients and have won millions since 2004.
       
      We have clients who had claims turned down by the FOS, but we challenged and convinced the FOS to change their mind. We have also challenged offers and achieved higher amounts than clients would have accepted if they had claimed themselves.
       
      For many clients, we make them better off (even after our fee is deducted) through higher offers, we take away much of the administrative burden, we lower hassle and stress (i.e. we will wait the 30 minutes for some lenders to answer the phone rather than you having to spend this time during your your lunch break doing it yourself), we provide peace of mind, reassurance, guidance, knowledge, expertise and, above all a friendly hand to hold.
       
      I have worked as a complaints consultant at many banks and financial companies and can assure you that not all are pleasant and helpful to their customers. Some will reject all complaints, some will only pay out if you raise specific issues, many will try to limit their liabilities, especially if they are privately owned, or listed on the stockmarket. They also recruit staff who may make mistakes, which Joe Public won’t pick up on.
       
      You may be the kind of person who wishes to lay your own patio, do your own decorating, do your own plumbing, and the many other things you could pay a professional for but choose to learn yourself to keep costs down, or you may decide that, actually, using a fairly priced, honest and competent professional is the best all round solution.
       
      So, to conclude, like anything in life, you can do it yourself to reduce¬†costs, but¬†will it be a false economy and more hassle than you can tolerate? I tried to fix my¬†own car once, but bodged it and it ended up doing more damage, costing me more. I also did my own tax return once, but that gave me a headache and I wasn’t 100% if I had done it properly, causing me stress, so now I pay an Accountant.
       
      Take a look at our site. I am sure you will agree, it is helpful, honest and offers a fair pricing system (tiered to reflect the increasing nominal cost for higher refunds):
       
      http://www.ppi-refund-claim.co.uk
       
      We’d be more than happy to speak with Mr Lewis, if MSE changes its stance on CMCs.Being a reputable firm, we would also like to see the back of high charging scammers and rip off merchants that give CMCs a bad name.
       

    • Anonymous

      If you don’t want to recomend the best or fairest, It would still be benefitial to people to know who the really bad companies/crooks are and I don’t just mean crooks as in “THE BANKS” lol!” It would be better to know that the PPI claims companies you were looking at were safe, even if a little bit expensive.

      Thanks.

    • Anonymous

      Yes you could, at least to warn people from any known bad firms. Then at least people might feel a bit safer if they decide to use a company for their own reasons, better that than the public getting ripped off for a second time (if they choose too do that)!

    • http://www.facebook.com/people/Geoff-Kelly/806230619 Geoff Kelly

      yes..because some people just need a helping hand  and do not understand the system like most of us posters..keeping normal joe from the sharks has to be a plus with drawbacks which we do not like but understand.

    • Anonymous

      I must agree with Laura, …. Martin, you got enough stick over the bank charges to which the banks to a degree won then. ¬† Now, it is a different ball game, the banks lost this round. However, I don’t think it would be a smart move to to highlight claims handlers. ¬†BUT, you could provide templates as used by claim handlers so everyone has an option as to whether to proceed themselves. ¬† After all, claims handlers will be asking the same questions etc.

    • Jonathan Willis

      For all the good claim handlers out there, mistakes do happen. If you recommend a handler, who has a problem or change in management, the people you recommend will come back at you. As stated impartial advice is the key thing, let forum members guide people on “recommended” companies through freedom of speech. This mitigates some risks you would expose yourself to by listing good handlers on the site or in emails. At the most, I would only suggust you list well-known trouble makers!

    • Anonymous

      I went with a PPI claims company some time ago and didn’t know how to get away fom them after reading what you had said. Today they told me I would pay back over ¬£400 from the ¬£1668 of my claim. They are charging 29%. Two things never use them secondly they told me I would get much more what an idiot I feel!