There’s no need to pay to reclaim payment protection insurance (PPI). However due to spam texts, cold calling, saturation TV ads and huge per-click fees to advertise on Google, many people give no-win no-fee claims management companies 30% of their repayment without knowing that.
We’ve teamed up with Which? for nearly a year now to get the "you can do it for free" message out.
This included a massive PPI summit where we called the banks, the Financial Ombudsman Service and the Financial Services Authority (FSA) together for a series of meetings to discuss how to get the message out and the banks needed to change to make it easier.
Why paid ads are so important
While the TV ads create awareness â€“ often it’s of reclaiming itself, rather than the specific brands. I still get questioned regularly by people asking which company to use, as they think they NEED to do it via a claims firm.
Many people, however, do what we all do these days when we need info â€“ they Google. Currently, if you Google "PPI reclaiming", while the MSE Reclaim PPI for Free guide often comes top of its natural search, it’s swamped with claims company adverts all around it.
Search experts say to really be effective, you need a presence in both natural and paid searches.
How the ads will be paid for?
As PPI is so lucrative for claims firms, and the cost of getting high up on Google is extortionate, sometimes it’s a few pounds per click. They can afford to pay it, as the PPI claims industry is likely to make well over a billion pounds.
Neither us, nor Which?, nor other consumer groups can justify shelling out the huge amounts to compete at any volume with claims firms, as we all provide PPI info for free and it doesn’t generate revenue.
During the PPI summit we asked the banks to put their money where their mouths are â€“ and to back up their call that they want people to reclaim for free.
Sadly, they didn’t reply as loudly as we hoped, but fair play to Lloyds Banking Group. It proposed to me it’d offer an experiment to test putting paid ads up for MSE.
I suggested this should also be done for Which? and Citizens Advice, and it agreed.
Of course, we’re not conceding control, even for a micro-second:
- The ad text is directly controlled by the individual consumer group.
- There is no mention of Lloyds, and it gets no special treatment.
- The links go through to each group’s PPI reclaiming guide.
- The guides won’t be altered in any way and remain entirely editorially independent.
This is a really interesting experiment for the short term. The free PPI campaigners have risked being crowded out of the market by the paid-for companies, and simply don’t have the financial clout to compete â€“ but this may help level the playing field.
Of course some may still choose to use claims companies for convenience, and provided they understand they’re making a choice to pay, that’s fine (see my 10 things you need to know if using a PPI claims firm blog).