"Banks’ slow reaction to the mis-selling of payment protection insurance (PPI) meant claims management firms pocketed £5bn of consumers’ compensation, a report has claimed.
New analysis from Citizens Advice and Citizens Advice Scotland found 39% of people who used a claims firm were not aware they could make a claim without the assistance of a claims management company.
But 47% of those who used a claims company admitted if they were aware of the free materials available to make a claim, they would not have used a claims firm.
Gillian Guy, chief executive of Citizens Advice, said: “Consumers have lost out on billions of pounds worth of compensation because banks were too slow to get a grip on the PPI scandal.
“By banks originally dragging their feet and providing inadequate redress, claims management companies seized an opportunity to take up to 25% of people’s compensation for admin work that consumers can do themselves for free.”
In its report, ‘The cost of redress’, the charity uncovered evidence of poor practices among claims companies, with 28% of UK adults who had used a claims management firm saying they had been put under pressure to make a claim, while 27% said the fee structure was not clearly explained."
The next miss-selling scandal ?? Of course, many of the claims companies will have disappeared by then --- will the banks have to pay again !! ??
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
I cant wait till the goverment launch a investigation not only into debt management companies but aslo IVA firms. It will happen and maybe we will one day be able to re claim the fees we have all been forced to pay. What goes around comes around.
font size="1" face="Verdana, Arial, Helvetica">quote:<hr height="1" noshade>Originally posted by MelanieGiles
OK - I can answer this one in my capacity of MD of a claims management company.
1 All of our clients are advised that they could process the claims themselves, and are signposted to websites which provide them with such details.
2 Our fees are around 50% of the industry norm, and my staff work very hard on behalf of those clients who choose to engage with us.
3 We didn't create this situation - the banks did!
Mel, as with any other industry there are good and there are bad. It comes as no surprise that you carry your own ethos into the claims company too and I am sure it will, also, be "gold standard".
Unfortunately, as with other industries, not all share the same ethical outlook.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
As IVA'ers we 'll never see any of the money so does it really matter to us how much they charge? The claims management company will get some, the IP will get some and the creditors will get some, these 3 will always add to 100%.
It does matter, as whether you are going to be receiving any money or not, you are the party engaging with the claims management company, and it is therefore important that you fully understand the charges suggested, and challenge them if they appear to be incorrect.
My firm was initially set up to service my own client base, as I researched the marketplace and did not like what I saw, however we also act for non-clients as well Foggy.
Thank you Mel. Like you, I do not like what is happening in this field, but at least now have a firm I am comfortable to point people in the direction of.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
As I understand it using a third party claims company (other than one connected to an IP ?) risks the customer being left with a bill instead of a payout doesn't it ? as commission can be charged on money awarded but set off by banks
Yes, Martin, that is very true. For safety I would advise anybody in an IVA to leave it to their IP to sort our ( or do it yourself). For those not in an IVA it is, of course, better to do it yourself, if able. But, for various reasons, some prefer to have someone to do it for them --- for which they really need to sort the wheat from the chaff.
My opinions are merely that .. opinions based on experience. Always seek professional advice.
IVA Completed 23rd July 2013 .... C.C. 10th January 2014
I was told that as part of my obligation to my IVA that i would need to use the recommended claims company to pursue any claims - i told them that i was sure there were none and rightly there were none but as a result, i was hit with a 170 pound bill for them looking into these claims. I wasn't told that there would be a fee for this, i assumed that as the IVA company said that i had to even though i was sure there were none that i would not then be billed. I learned yet another valuable lesson - question everything!!!!!
IVA started Jan 2012
Last payment made June 2014 @100p
Completion certificate received Sept 2014
I only found out about the fee being billed to me last week when i finally got my estimated outcome statement even though the PPI claims were done over 18 months ago.
IVA started Jan 2012
Last payment made June 2014 @100p
Completion certificate received Sept 2014
Claims management companies should most definitely not be charging fees for monies which creditors are setting-off earlier balances - and you should all check the contractual documentation you signed initially, as this should be made clear within.
Surely you were asked to sign their terms and conditions at the outset, urbanfox?
