Unscrupulous “claims handling” companies bombarding prospects with telephone calls and texts
Complaints to the Telephone Preference Service, the media and the regulator of claims handling companies, the Ministry of Justice, have increased as claims handling companies use ever more intrusive techniques to mop up commissions against an estimated £9 billion in compensation owed by banks to consumers over the PPI mis-selling scandal.
It is becoming an increasingly common practise for these companies to use unsolicited text messages to drum up leads – often these are written to indicate that the company in question has some knowledge of the customer’s financial affairs or credit histories, like this one here:
It is claimed that some of these companies have targeted the elderly and vulnerable, including dementia sufferers. The Times newspaper was even contacted about cases where the customer had never actually had a loan or credit card (let alone one where PPI had been sold) but fees for the ‘recovery’ of PPI were still taken. Clearly in these cases there was never any prospect of recovering compensation for the customer as none was due.
The Times reveals that the claims company Tucan Claims persuaded an 83 year old woman to part with a processing fee even though she had not taken a loan in over 30 years – so there was no reasonable prospect of the firm making a successful claim on her behalf. Tucan attracted the attention of the Ministry of Justice who petitioned to suspend Tucan’s authorisation as a claims management business, but Tucan successfully appealed this. The Ministry of Justice took action against Tucan Claims in particular over the particularly high advance fees it was charging customers for it’s services.
Whilst Tucan Claims awaits the appeal hearing, it is forbidden from charging any advance fees to customers. Complaints dating back four years indicate that past customers have been charged £199-£250 upfront for services. PPI reclaim is actually a fairly simple process that doesn’t require the services of an intemediary.
Billions owed to consumers
In April 2011, the High Court ruled that High Street banks needed to return billions of pounds to consumers for mis-selling Payment Protection Insurance – PPI on loans and credit cards products – owed to an estimated two and a half million people in the UK.
Tucan Claims aren’t the only ‘claims management’ firm to have attracted complaints. A quick Google search is all that is needed to see that other firms, including Gladstone Brooks, “We Fight Any Claim” and Belmont Thornton claims.
Whilst there might be some weight in an argument put forward by claims management firms, that they bring some expertise and experience to the table, this has frequently been mis-represented by the firms. For example, there was a recorded example on a Which report of We Fight Any Claims telling an enquirer that they have 90% success, compared with 10% doing it yourself. There are also examples of firms taking advance fees to recover PPI where there was absolutely no PPI on the account to start with.
There’s plenty of free advice on recovering PPI on websites such as Moneysavingexpert, with example and template letters. If you really can’t be bothered doing it yourself and accept that fact that perhaps 20% of your claim will go to cover fees, PPI claim firms are available. Buyer beware – NEVER pay an upfront fee to one of these firms, and understand everything before you sign.