23 April 2012

Consumers Told To Make PPI Claims Directly

A summit will be held today aiming to shed light on the cost of using claims management companies for payment protection insurance (PPI) claims.

Banks, credit card company’s and consumer groups will meet to discuss how best to make people aware that they can make claims directly, without using one of the many claims management companies which have popped up in the period since the mis-selling of PPI was highlighted.

PPI was supposed to repay people's loans if their income dropped because they fell ill or lost their jobs, but hundreds of thousands of people were mis-sold the policies.

The bid for compensation has become a lucrative business opportunity for an estimated 800 claims management companies, who take a cut of 25% or more from the average £3,000 payout.

Richard Lloyd, executive director of Which?, said: "If people use claims management companies, they could be stung twice.

"They are stung once when sold payment protection insurance, and they will be stung again if a claims management company charges them a fee of 25% or more for doing something that they can do themselves."

A separate meeting will also be arranged with representatives of claims management companies.

(H)