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MSE to advertise ‘free PPI reclaiming’ on Google

MSE to advertise 'free PPI reclaiming' on Google

MSE to advertise 'free PPI reclaiming' on Google

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 – 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 – 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 – 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 – 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).

Is it worth using a PPI claims company? – 10 things you need to know

Is it worth using a PPI claims company?

Is it worth using a PPI claims company?

"You don’t need to pay to reclaim" – that’s the message we’ve been pushing this week, in a major joint campaign with Which? Yet many have asked if this means it’s never right to use a claims company. Like most things it’s never completely binary, so I wanted to jot down some thoughts.

The mischief we’ve been trying to solve with the Don’t Pay To Reclaim advert and the PPI summit is that huge numbers are unnecessarily paying to reclaim.  

With an estimated £9 billion being given out by the banks, and claims management companies doing around half of those claims, taking 30% of people’s cash each time, this is a £1billion+ industry. It’s so lucrative, these companies can afford to dominate the airwaves and the messaging, spending £2million a month on advertising.

The 10 things people need to know before using claims companies

This communication strength has led to an information misbalance. Below I’ve listed the main things I think people should know before using a claims company – but many simply aren’t aware of.

  1. You can do it yourself for free (see Reclaim PPI For Free for how).

  2. It’s much easier than it used to be since banks lost last year’s court case – many people now get paid out after just one letter or call.

  3. You have no greater chance of success with a claims company than without. In fact, guidelines state claims companies shouldn’t suggest this.

  4. Many claims firms use similar templates to the ones we offer for free in our guides.

  5. The prices firms charge are very high – often 25%, plus VAT, of what you get back. People should have this explained in practical terms before signing up. So if you’re due £5,000, then that’s £1,500 to the claims company.

  6. Beware using claims companies if you are in arrears. Often banks will use the money to clear or reduce the debts. If this happens, you won’t see the cash, but the claims company will still want its cut. So you’ll have to shell out, out of your own pocket. This is one the worst issues for me.

  7. A few claims companies charge an upfront fee as well as a win fee. Beware if you are going to do this – never pay upfront, stick with no win, no fee.

  8. Beware any company that will charge you on ‘future PPI savings’ – it could cost you large. To explain, imagine you’re two years into a 10-year £10,000 loan. The mis-sold PPI on it is £3,000, but you’ve only paid £600 of it so far.

    If your reclaim is successful, while the bank will give you £600 back, these type of claims companies unscrupulously want their 30% on the whole £3,000 – so they’ll demand £900. Yet you’ve received less than that, so overall it’s a loss.

    This is outrageous, as for future premiums you could’ve simply just cancelled the PPI.

  9. Once you sign up, you’ll need to pay if you do it yourself. This is a growing issue. People start a claim, become unhappy with the company and then find even if they choose to go it alone, it’s going to want the fee anyway.

  10. To make matters worse, getting redress if things go wrong is very tough. Barring going to court, against a company which is likely to have its own legal firepower, you’re likely to be stuck.

If you know all of that, and make a rational choice – using a claims company is fine

If you know all these facts and decide to use a company, then it’s a legit, rational consumer choice. This is most likely to happen in the following circumstances:

  1. You wouldn’t bother doing it without. If you’re busy and know it’ll never happen otherwise, and are happy to pay a hefty 30%+ to get your cash back, then it’s a perfectly legitimate choice to decide to pay to get your mis-sold PPI money back.

  2. You’ve a pre-2005, non-Ombudsman case. For some with older cases of mis-selling that isn’t from banks, the Financial Ombudsman can’t adjudicate. An example would be a car finance deal PPI. In that case, if they don’t play ball then you will need to go to court – in which case a claims company on a no-win no-fee basis is useful.

    The problem is many claims companies just like to cherry-pick the easy cases. So it may be difficult to find one who’ll take this on.

  3. Mental health or illiteracy. For those people who would find the process too difficult to do themselves, a claims company may be a helpful route – though it is frustrating that society’s most vulnerable may need to pay. It may be worth seeing if your local Citizens Advice Bureau can help first.

If they were better regulated, I’d be less against them

The real problem here isn’t that claims companies exist. It’s that many – not all – play fast and loose, and there’s no redress if they do things wrong.

The fact it costs £9-£10 per click to advertise on Google shows just how profitable this lark is. The charges are disproportionate – I’d guess you could run a profitable claims company at a 10% fee.

There are too few barriers to setting up a claims company under Ministry of Justice regulations. While it has some operational standards that should be followed, there’s a very small team there monitoring an industry that’s exploded. It’s simply not resourced to put controls in. 

Worse still is the fact there’s no redress if things go wrong. What would be great is if the Legal Ombudsman were able to take on claims company complaints so there would be a free, independent, route for justice. That, combined with stronger rules of practice, would eliminate some of the issues described above.

With these measures, I think the problems with claims companies would lessen substantially and they would become a much more legitimate choice for many.

Of course there are some better claims companies right now. But finding them is a nightmare, and there is simply no authoritative way to cut the wheat from the chaff.


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 – yet some are using these companies anyway and there are scammers out there – 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…

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…

  • 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 – 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 – I even contemplated calling Which? and mooting a joint project for the following…

  • 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 – 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.

Related blogs

  • PPI Twitter clinic questions and answers
  • My PPI day diary – paps, snaps, clips and facts
  • How many times? "If your bank says no to PPI reclaiming, it’s not a failure!"

  • PPI Twitter clinic questions and answers

    PPI Twitter clinic questions and answers

    PPI Twitter clinic questions and answers

    I’m experimenting with live Twitter Q&A clinics on my Martin Lewis Twitter feed. Yesterday it was payment protection insurance (PPI) reclaiming, following the huge climb down by the banks – and their putting over £6 billion away to foot the bill.

    So, I thought it would be useful to recap the answers here. This is a direct transcript, so do remember it’s speedy and conversational with a maximum of 140 characters not an authoritative formal response. For full info see the Loan PPI reclaiming and Credit card PPI reclaiming guides.

    It’s worth noting that quite a few questions focused on when can I reclaim from? And, how do I get my details? So we’ll be boosting those elements of the guide and adding more in the weekly email.

    Twitter questions and answers (questions and answers are unedited)

    Q. How far back can you claim. Had a car loan a few years ago with PPI. Will the bank contact me? Thanks
    ML. Easy rule is within 6 years but not of when you got it, of when it’s still active, but sometimes is possible from further back

    Q. We are told our mortgage was miss sold but the company want £500. To proceed with the claim. Can you help
    ML. How dare they – you can complain for free, that’s outrageous. Just write a complaint then if they reject go to Financial Ombuds

    Q. I have a claim that was sent to iob (Ombudmsna – ML) should this get sorted now
    ML. hope so but don’t expect it to be quick!

    Q. My partner has a 7k loan and was missold by Lloyds TSB. How much is he likely to be entitled to?
    ML. At a guess £1,500 – £2,000

    Q. Can you claim for PPI on my M&S card that I don’t recall asking for & pay off monthly for a year and still charge each month
    ML. sounds likely read

    Q. can I claim PPI from Egg? Are they following the banks re PPI?
    ML. It applies to all finance companies – egg were fined a few years ago – so chances are high

    Q. Had a Cap1 credit card since Feb 2005, can I still claim?
    ML. if you were missold then I don’t see why not (provided insurance was still active within last 6 years)

    Q. I was made bankrupt, can I claim on any portion of ppi paid? thx
    ML. provided you were missold yes – but it may just be directed towards paying off your debts

    Q. If I haven’t already applied can I still appy and how?
    ML. yes and via

    Q. we have had 3 cars from welcome and were told we couldn’t leave with the new car unless we signed up for ppi
    ML. sounds like a strong case of misselling to me

    Q. wot i don’t understand is how we are able to prove it
    ML. If it’s been systemic misselling unlikely you’ll have to – they’ll have details

    Q. my husband had a loan from Barclays 4 yrs ago. he’s become bankrupt since & didn’t finish paying, we have no pprwrk.
    ML. You’ve a right to request paperwork, but the money could just be directed to pay off some of your debt

    Q. are HFC paying out I’ve been told they are still waiting to appeal
    Not heard that – also they were fined in 2008 (I think) so chances should be high.

    Q. made settlement with card company can I still claim for PPI which was not usable as was student and only employed PT.
    ML. the fact the card is closed is irrelevant, if you were missold you can reclaim

    Q. lloyds tried to sell me ppi, said no loan without it, got me to take out separate policy, but not theirs, can I still claim?
    ML. I’m guessing that was for a mortgage – if so then unlikely – as they can say it’s important that you get someone’s policy alongside the mortgage.

    Q. How far back can you claim. Had a car loan a few years ago with PPI. Will the bank contact me? Thanks
    ML. Easy rule is if the product was active within last 6 years – but you can try for longer. And no DO NOT ASSUME THEY WILL CONTACT U

    Q. My loan is with firstplus , deal was ppi refunded in 5 years Jan 2012, should I claim now plus interest or wait till Jan?
    ML. I don’t think you’re asking about being missold. I think that’s an extra option on the product – don’t know the details I’m afraid

    Q. I have seen PPI on my CC bill from about 3yrs ago, I remember being asked about it but never understood it and did cancel. is there anything I can do?
    ML. It depends whether you were missold see

    Q. Do you think issuing in the County Court would be a more effective way of consumers reclaiming PPI?
    ML. No I think it’s costly and unnecessary, though it may be quicker. With this ruling complaining is likely 2b easiest

    Q. I mortgaged in 2004 and was told PPI was compulsory by the advisor in bank. Can i reclaim?
    ML. Depends, MPPI can be compulsory by some lenders (ie they require you to have policy) but not THEIR policy.

    Q. my PPI claim has been with ombudsman for about a year still not allocated. Will the ruling speed things up?
    ML. Hmmm not sure about this – still waiting to see full impact. Unlikely in the short term though

    Q. took out ppi 9 years 15 years ago self employed the past 10 am I covered by ppi.
    ML. It is the situation WHEN YOU GOT LOAN OUT that counts – i think you’re saying you were employed when you got it so unlikely

    Q. bank doesn’t seem to be keen on reassessing my loan repayments by taking off the PPI and recalculating. What do I do?
    ML. If i understand your question they’re not letting you cancel. You should be allowed to cancel.

    Q. What if I don’t have old credit card information?
    ML. You have a right to request info on the credit agreement for £1 under Consumer Credit Act

    Q. I’ve been offered PPI rebate should I get interest lost?
    ML. They should offer it as standard, as that’s FSA guidance, if not request if from them (try friendly phone call first)

    Q. Hi Martin. Can I claim any PPI back for a Northern Rock mortgage I got out in 2001 and paid off a couple of years ago?
    ML. If it was missold then yes

    Q. PPI claim 4 £4k won thanks to your notes + dodgy paperwork their end. But payment been held til end of June. Is that normal?
    ML. YAY WELL DONE £4k win. It can take time for payment, if legit comp and promised payment I wouldn’t worry (though do call to push)

    Q. are all of the needed forms on your website?
    ML. OF COURSE :)

    Q. How do u know if you’ve been swizzed by bank. I pay insurance but don’t know how to get out of it or if I am entitled to rebate?
    ML. Read

    Q. Mrs been charged PPI for few years. CC said they wouldn’t refund as they’ve charged us 2 years without us raising it. Legit?
    ML. No not legit (provided it was missold in first place)

    Q. I know my mum is owed money through this but she’s lost loan/CC details! What to do?
    ML. She has a right to request info on the credit agreement for £1 under Consumer Credit Act

    Q. hi M sending a claim to Egg. The ppi was part of loan, inextricable as only one policy no. Should I ask for interest/comp too?
    ML. No harm in asking, just don’t bank on getting it.
    ML. Just to clarify interest is likely – but compensation (ie not just money back) unlikely

    Q. my ppi was added to the cost of the mortgage in one lump without my knowledge. Is that something i can claim back?
    ML. It’s slightly different with mortgage, but lack of knowledge on any product is likely to be misselling

    Q. I had PPI on a loan about 10 yrs ago. It’s paid off & I don’t have any of the paperwork. Any way I can look into it?
    ML. You can request paperwork, but you may be timed out, unless you were still repaying within last six years

    Q. 25 yrs loan only given 10 yrs ins but paying back over 25 yrs can i claim as misold/bad product
    ML. sounds like it, provided it was missold, tough to be exact on this though

    Q. can i claim if loan is not paid off and i’m making reduced payments
    ML. yes if missold

    Q. i took a loan out in feb 2005, paid it off dec 2006, lost paperwork but i know i was mis-sold ppi, can i claim? #MLPPI
    ML. yes it’s within 6 years so should be fine – request info on the old card you’ve a right to it

    Q. hey Martin, I was misold a PPI via an independent mortgage advisor and lender Legal & General, could I still make a claim? tks
    ML. If you were missold the fact it was by an advisor makes no difference you can still claim

    Q. we had one going through with cartel then they went bust what to do!!
    ML. Start it again yourself, just write to the bank – use

    Q. i had a loan with PPI that I never asked for, I haven’t got many details apart from start date and bank – can I still apply?
    ML. call them up

    Q. sent letter and form (off MSE) to Bluesky Personal Finance & had no reply they’re charging me interest on my PPI is the right?
    ML. Toughy are they still trading (i’m not sure they are) if not you may need to go via Fin Services Comp Scheme

    Q. Paid off HSBC loan with PPI one year into 4 year loan, CAN I CLAIM IF FRONT LOADED? Didn’t need PPI as could pay loan off.
    ML. Yes you can – provided it was miss-sold of course.

    Q. Despite many requests bank has not sent my T&Cs. Should I just go ahead and start making the claim anyway?
    ML. yes

    Q. Is it possible to claim PPI from a Nationwide loan? I’ve not seen them mentioned on any list. #MLPPI
    ML. They aren’t special, if they missold yes

    Q. – PPI paid on loan taken on 2/12/2004, 5 months after 6yr limit. worth trying to reclaim? #MLPPI
    ML. Yes, especially if the loan was still active, as is likely within last 6 years – as that’s what counts

    Q. – PPI on long standing CC. How do I calculate the amounts paid in total or will they do that? #MLPPI
    ML. they’ll do that

    Q. – PPI on old, now cancelled CC’s. How do you get information from companies (Cap One). #MLPPI
    ML. there’s a template letter in

    Q. I think I might be entitled to compo on a couple of old deals I was in but don’t know if I’ve kept paperwork. Where do I stand?
    ML. Request the paperwork off lender – you have a right to get a copy of the agreement for £1 under Consumer Credit Act

    Q. wife got loan with AA forced PPI as single. Approx 9 yrs ago no paperwork! Any chance
    ML. Request the paperwork off lender – you have a right to get a copy of the agreement for £1 under Consumer Credit Act

    Q. is 6-year time scale when PPI was taken out or the last payment?
    ML. it’s when it was last active generally so if you were still paying 6 years ago you should be fine

    Q. does RBS have a history of misselling PPI on their graduate loans? (Circa 2006)
    ML. They weren’t fined, but misselling has been systemic on most kinds of loans so it is likely – but can’t give firm yes or no

    Q. i have a loan with welcome finance. 2 questions. 1 was not told i had insurance on the loan 2 did find out had insurance. 2 had to claim on loan due to illness and sickness. welcome did not tell me the insurance was ending
    ML. Being told you had to is misselling. Yet Welcome Finance has closed, so you’ll need go via Financial Services Comp Scheme

    Q. am confused if welcome has closed then who is that’s chasing me they say it’s welcome.
    ML. Welcome’s in default, not closed. FSCS can help with sales post Jan 2005 (go direct for pre 2005)

    Q. Can I claim even if I re-financed the loan and then didn’t take PPI when re-finacing?
    ML. It is the situation when you GOT a loan that counts, so if missold when you got the original loan with PPI then yes

    Q. how far back can we claim? I took out a loan with Lloyds when I was on a short term contract back in the mid 90’s
    ML. You can try that far back, but it is unlikely

    Q. #MLPPI Hi took out hsbc ppi Feb/99. I told them didn’t need it. He said prob wouldn’t get loan without. Am i too late to claim
    ML. Yep that is a lie – loan rates cannot be conditional on PPI. The problem is you may struggle as it was 99 see

    Q. i had a loan with PPI that I never asked for, I haven’t got many details apart from start date and bank – can I still apply?
    ML. Giving you PPI without consent sound like serious misselling, you’ve a right to ask them for any info too

    Q. can my mum claim as she got told she had to take ppi to get her loan as she is over 50? #MLPPI
    ML. Being told you ‘must take PPI’ is wrong, therefore v. likely to be misselling see