The health insurance and protection market covered
FSCS warns of commission-led claims management firms
The Financial Services Compensation Scheme (FSCS) is warning consumers against using claims management companies to retrieve money from mis-sold payment protection insurance (PPI).
Figures released by the FSCS show 75% of claims between 2008 and 2011 came from claims management firms, which the FSCS said can take commission "of up to 25% or more."
"Consumers should be aware claiming compensation from the FSCS is free and the process is not difficult," said chief executive Mark Neale.
Paying a third party to submit a claim does not significantly increase the chances of receiving compensation either, the FSCS warned.
The analysis shows the number of successful claims made by individuals is almost the same as for those made by third parties. The uphold rate for claims made through third parties is just under 87%, compared with just over 83% for individuals.
"Each application is judged on its individual merits," said Neale. "If people make the claim directly and it is successful, they receive the full payment, without having to share a big cut with a third party."
Data from the FSA this week showed a 41% increase in PPI payouts in November - £379m, up from £268m.
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25percent would be cheap!
In my ignorance many years ago I took out PPI insurance witha MBNA credit card. Yes as an IFA I should have known better. I made a claim via Tucan Claims 250 pounds initial and 10 percent of the winnings. They received my award of over 17000 pounds in September 2011 and will not send me the money. They are ignoring all comunication and there is little I can do apart from winding them up at a cost of 3000 pounds. Peter
Posted by: Peter Collins IFA | Jan 31 2012
Claims Management
Most people have legal expenses insurance. If they need help to make a claim on the FSCS, they can get it from a solicitor without paying any fees. People with these policies certainly don't need CMCs. These policies are really worthwhile for small legal jobs like this, yet they are so often forgoten. Robert Morfee
Posted by: Robert Morfe | Jan 30 2012
About time for a reality check over lunch with Hector
Wonders will never cease ! Soon there may be a lunch between FSCS and Hector (paid by the adviser fees of course !) and perhaps someone might suggest it is the lax control of the Banks (fault of the FSA) which has caused this PPI debacle in the first place ....oh well ...we can only dream !
Posted by: Graham | Jan 30 2012
And the world isn't flat.
Good grief. It has taken them this long to come out with this. Have they told the FOS? If they lived in the real world some of their own staff members must surely have had some of the e-mails, texts, phone calls or been accosted in a shopping centre as many of us have experienced over the last few years. Why haven’t they done anything before now? Does this bespeak of a hidebound, bureaucratic and inefficient Quango?
Posted by: Harry Katz | Jan 30 2012
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