Don’t gamble with your PPI claim. Check the small print!

Don't gamble with your PPI claim

But I hate reading small print!

We get it. Once you decide to go ahead with a PPI claim you probably just want to get on with it. After all, if you had loads of spare time, you’d probably have had a go at claiming already.

But please – take a breath before you choose your PPI claims company. Jumping in without checking their small print could cost you dear and be something you come to regret. Read this quick guide to find out what you need to know.

Why is this so important?

Sadly, there have been some horrible abuses of consumers by PPI claims companies over the last few years. These have ranged from dubious / illegal telemarketing activities and hard-sell tactics through to extremely high fees for services hidden in small print. Some consumers have given into pressure over the phone and signed a piece of paper which they thought was simply to allow a company to do a PPI check. In fact they’ve signed up (often without checking the small print) to a contract with a claims company on very poor terms. Examples of poor contract terms:

  • There’s an upfront fee which will be “refunded” later on – there’s no need to pay up front and where this has been used it’s sometimes proved very difficult to get that refund.
  • Terms which allow the claims company to go after every potential claim including non PPI ones – this could mean consumers being involved in complaints they did not wish. In some cases this has included claims where the consumer has arrears so they lose out financially.
  • Future claims – we’ve even heard of claims companies trying to take a cut of future complaints which they play no part in handing for the consumer.

Although most of these practices have gotten rarer as regulation has become better, consumers need to tread carefully.

The biggest problem still remaining however are very high, poorly communicated fees for the same service. These days fees are almost always a percentage of the compensation you get. This could be £1’000s, so the difference in fees can be huge.  In practice, fees range from 10% up to 39% or more**.

We’ve heard so many sad stories of consumers who wanted to improve their finances. They just wanted to get back what their lender owed them and did not think too much about what fees might be charged. Later on they find out that the fees that they need to pay from their compensation are much higher than they imagined.

In most cases, these consumers have signed up without checking what the fees would be.

OK – So how do I get a good deal?

Avoid up front fees

…at all costs. You should never go with a company that wants to charge you a fee up front. This used to be more common, but these days there is a huge choice of companies who all work on a no win, no fee basis that it’s not necessary to pay up front.

Check fee rates

Sadly, many PPI claims management companies do not make it easy to see what their charges are.  You’ll find ours in big numbers on our home page (15% + VAT (18% total)), but this is far from typical. Many companies bury this information in their legal Terms and Conditions which is usually in small print and tucked away somewhere on their web-site.

We think that’s disgraceful. We know once they decide to re-claim PPI people want to get on with it and may go with one of the big names they have seen on TV or the first company that comes up on Google. They may only see the Terms and Conditions once they receive them in the post and by then, they don’t want to start looking at other companies again.

You can compare fees charged by a range of claims companies by clicking here. You may be surprised how much difference to the money you’ll end up with.

Check for other charges

Fortunately, other fees and charges are reasonably rare (unlike with other types of legal claims), but it’s worth checking those terms before signing. The only other time we’ll charge you something is if you decide to cancel using our service after 14 days. Then we’ll make a charge for the time we’ve spent on your claim up to then. This is typical in “no win, no fee” arrangements because otherwise we lose out if people change their mind even after they’ve had a couple of weeks to think about things.

The Easy Way to Shop Around.

Time-saving Tip
If their fee rate is not prominent and clear on their home page, it’s probably expensive.

Shopping around is essential to avoid big regrets later on.  But who’s got time?

Here’s a  tip. If a company does not display their fee prominently, it’s probably high. By all means dig out the percentage fee if you have time. You’ll probably find it in their “Terms and Conditions” or “Terms of Business”. These will  often be in a smaller link to a PDF document at the very bottom of the page. Get that document and then do a Ctrl+F search for “fee” or “%”.  Or, you could just move on to a company who are a bit more transparent about their fees.

If you found this article useful, please consider sharing it or liking it on Facebook so that we can help more people avoid getting stung (you can get to our Facebook page through the box at the bottom right of this page or search for @FairerPPI).

If you’d like us to check whether you have a PPI claim, please fill out the form and we’ll get a Claims Pack out to you straightaway. You can also contact us if you have any questions about this or other aspects of re-claiming PPI.

** These numbers are our honest understanding of the range of PPI fees in September 2016 from our research.  We can’t check every company however. So there could be someone who has higher or lower fees than this.

image credit: Negative Space