Payment protection insurance (PPI) has been widely mis-sold. But you can easily make a complaint yourself – there is lots of free help available.
What claims management companies do
They take up complaints against financial services companies on behalf of people like you.
They deal with many types of complaints about financial services but are particularly interested in PPI complaints at the moment.
They might contact you by letter, telephone or text, offer to make a complaint on your behalf and promise to get you a large compensation payment.
But their charges can be high. For example, if you’re awarded £1,000 in compensation you could typically miss out on around £300 of that money.
There is evidence to suggest that complaints management companies are making complaints on behalf of people who have never been sold a policy.
If you’re contacted make sure you’ve taken a policy out. You can do this by checking your paperwork.
It’s often sold alongside credit cards, loans or mortgages.
Making a complaint
You can make a complaint yourself. You’ll need to contact the business that sold you the policy.
It’s usually best to do this in writing and check the firm has received your complaint.
If you are unsure whether you have a PPI policy or whether you want to make a complaint our Money Advisers might be able to help.
You will not be charged for this service.
If you need help making a complaint, there is free support available.
For example, the Financial Ombudsman Service (the Ombudsman) has an online PPI resource that includes a questionnaire to make your complaint.
This will help you include all the relevant information.
Don’t worry if you’re not confident in dealing with the firm.
As long as you have given the firm eight weeks to deal with your complaint, you can ask the Ombudsman to take up the matter if the firm hasn’t responded or if you’re not happy with their response.
The Ombudsman is a free, independent service for settling disputes that consumers and financial businesses haven’t been able to resolve themselves.
The Ombudsman looks at the facts of the case – not at how well you present your complaint.
Many PPI complaints referred to the Ombudsman are found in the consumer’s favour.
And their statistics show that if you refer your complaint to them yourself, you’re just as likely to win compensation as if you were to pay a claims management company to do it for you.
If you do need somebody to act on your behalf, you could ask your local Citizens Advice Bureau, or a friend, carer or relative, to help.
This is your right.
Using a claims management company
From April 2019, the Government announced that the FCA would take over regulation of CMCs. Regulation will extend to Scotland, where firms are currently unregulated. It means firms will need to go through the FCA’s authorisation process.
The FCA’s proposals will require CMCs to provide a potential customer with a short summary document containing important information such as an illustration of fees charged and an overview of the services the CMC will provide.
This document will need to be provided before any contract is agreed.
CMCs will also need to highlight any free alternatives to using the CMC, such as ombudsmen schemes, in marketing material and pre-contract disclosures.
CMCs that buy so-called ‘lead lists’ from third parties will be required to carry out due diligence to ensure that the leads have been obtained legally and to keep records of this. The FCA is also proposing that CMCs will have to record and keep all calls with customers for at least 12 months.
Other requirements on firms will include a requirement for firms to hold capital linked to the type of business they undertake and further new requirements to protect any money firms hold on behalf of clients.
If you decide to use a claims management company for any type of complaint, make sure that it’s regulated by the Financial Conduct Authority.
If you’re unhappy with the service you’ve received from a claims management company, you can now complain directly to the Financial Ombudsman Service (FOS).
Stop unwanted calls or post
If you want to avoid being contacted by a claims management company (or other company without you having requested it) you can register with the Telephone Preference Service to stop receiving unsolicited sales or marketing calls, and with the Mailing Preference Serviceopens in new window to stop unwanted post.
Whatever your situation, get clear, unbiased information and advice from the Money Advice Service.
If you can’t find what you’re looking for on our website or have a question about money, call one of our trained advisers on 0800 138 7777.
Did you find this guide helpful?
Thank you for your feedback