How do I choose the best PPI claims company, and avoid the cowboys?
If you’ve decided to use a claims management company to progress your complaint you need to think carefully about which company you choose.
How people pick a claims management company varies. Some just get a cold-calls (against the rules all regulated companies should follow) and decide to go ahead. Others see adverts on tv or in the paper and just call them and start the process. Whereas others speak to a number of different companies and go ahead with the one that makes them feel most comfortable, has the simplest forms, says they can do it in the quickest time (another breach of the rules) and others select it entirely on cost. Some of these choices can end up being a costly mistake.
Some companies have just popped up because they saw the volume of people that were mis sold PPI (or before that for bank charges). Others have been around for decades and with thier experience we have moved into other areas. Once established companies noticed a field that involved large numbers of customers being mis-sold they started advertising which led to new companies looking at this area and eventually led to some of the further FSA investigations which led to even more firms being established to try and claim compensation. Because these new firms can’t rely on their experience or previous reputation they have to compete on cost, or heavily advertise or cold call etc. However the main problem is their lack or experience and understanding of the rules and procedures.
Claims has been operating for almost 25 years, before that its founder was a financial journalist, so already had come to understand the banks’ and regulators’ rules and procedures. We were established well before the Financial Ombudsman Service was even set up, which is the place where we now refer the complaints which we cannot resolve with the firms directly.
We recently had a call from an individual who had instructed a different claims management company. This company had apparently submitted a complaint to the bank which they had then rejected. The next step, given the features of the case, should have been referring the case to the Financial Ombudsman Service (FOS) as it was clearly wrongly rejected and the policy had been mis-sold. However, instead of doing this they sent this letter to the client.
Although some policies were sold on a non-advised basis before 2005 the overwhelming majority of cases were advised sales and had to follow similar rules to those after 2005. Even though the regulation only became compulsory in 2005 most firms were regulated well before this so firms had to ensure that the advice was appropriate to the clients circumstances, that it was properly explained and that clients understood what they were purchasing.
In this case it became apparent that this was an advised sale, the firm was regulated and that the sale wasn’t appropriate and the complaint should have been escalated to the Financial Ombudsman Service (FOS) who are likely to rule in the consumer’s favour and require the firm to pay compensation.
Luckily in this case the customer contacted us within just a few days of getting the letter from the other firm, however other people haven’t been so lucky. Once a complaint has been lodged against a firm they should send a Final Response within 8 weeks (although its often longer than this). The Final Response letter states you have 6 months to refer the matter to the Financial Ombudsman Service if you are unhappy with their response. If you don’t do so then the Ombudsman will not be able to look at the case. If you used a Claims Management Company (CMC) the rejection letter from the firm may not even be sent to you, but because you instructed the CMC it is assumed that you will have seen this letter even if you haven’t!
The rules on the deadlines are interpreted very narrowly and the FOS cannot normally accept cases that miss the deadline and all the bank needs to do is show they sent the letter to either you or your CMC. It is therefore important to consider which company you choose to progress your complaint or it could end up being a costly mistake meaning you don’t get the compensation you are entitled to.