Claim PPI yourself or use a claims management company.

DIY PPI claim or get help signpost

The choice to make.

Should you try to claim PPI yourself or get help from a PPI claims management company?  Perhaps you’d expect us to say “always use a PPI claims management company”!  Well, we may have something to gain from that, but we believe in the bigger picture here.  If you can’t trust us to give honest advice, how can you trust us with your claim?

When to claim PPI yourself

You can make a complaint to claim PPI yourself for free by writing directly to the bank who sold you the PPI (or another lender for a loan or mortgage).  This need not be complex. If the lender rejects your claim you can also then complain to the Financial Ombudsman Service (FOS) – again free.

For anyone that:

  1. is comfortable understanding the rules on mis-selling and how to make a complaint and
  2. can write a formal letter and fill out a PPI Consumer Questionnaire for each company (the 8-12 page forms used by the banks and the Financial Ombudsman Service (FOS))
  3. has the time.

This is often a good option.  You’ll get all the compensation if your complaint is successful and your only costs are a few stamps and your time.

On the other hand, if you use any PPI claims management company you’ll be charged a fee.  Most claims companies now work on a no win, no fee* basis these days. Avoid any company that wants to charge an up front fee at all costs, it could be a scam. You’ll typically pay a percentage of the compensation your lender(s) pay to you. If your claim is unsuccessful you will not charged anything. At least that’s how we work. Please see our Terms and Conditions for the full details. You’ll need to check what other companies using the phrase “no win, no fee” mean and whether they have any other charges which may apply of course.

Like others, we need to charge a fee for the service we provide, but we work hard to keep this low. Ours (15% + VAT (18% total)) is much lower than most. At the time of writing we don’t know of anyone charging less. We also think it’s important to be open about the costs so that you can make a proper choice. We’re appalled by how many companies hide their fees and charges away in small print. When you do find them, they may be 30%, 36% or even 39% including VAT for the same job. If you want to get a feel for what this means to your pocket, you can compare fees here.

When to consider using a PPI claims management company

So why on earth would you use a PPI claims management company rather than doing a PPI claim yourself?  Certainly if you believe the media you should run a mile! Some of the poor practices over the last few years partly justify these warnings. Believe us, we’ve been plagued just as much by cold calls and texts. That’s why we don’t and will never use these methods. We know that the advice given by the media to claim PPI yourself is well-intentioned, but we also feel it is a slightly simplistic view.  Here’s why.

There are some good reasons to get some help worth considering:

    1. It may just be that you’re not confident writing letters and setting out your arguments for why you were mis-sold.

 

    1. Perhaps you’d feel uncomfortable dealing with any follow-up letters and ‘phone calls from banks or the Financial Ombudsman Service (FOS) investigating your claims.  Many of us don’t like dealing with banks at the best of times.

      If this is the case, you could try to get some support from e.g. the Citizens’ Advice Bureau. There are also good sources of information out there now for free from people like moneysavingexpert.

      It will still be down to you to dig out the details of your finances, write your letters, fill in the forms and deal with any correspondence or calls from the banks’ claims departments.

      As Uswitch.com says “In some cases though a claims firm can ease some of the pressure on you by removing the need to deal with the company directly and having to handle paperwork.

 

    1. Perhaps your time is  better spent in your work or with your family. After all, you could spend time on a claim which may or may not pay out. The good thing about no win, no fee* is that we’re taking the risk for you. It’s our time and money on the line pursuing the claim and you only pay a fee if you get a result.

 

  1. If your lenders say “no”, will you know if you have a strong claim and if it’s worth fighting on? Some consumers find this hard, but a professional dealing with lots of claims will be familiar with how and when to re-argue your case.

Why else?

Well, we believe there are also some other good reasons which you won’t hear many talking about.

When claiming PPI was too easy.

The facts (from the Financial Conduct Authority) are that the banks paid most claims without question in 2012.  The courts made a ruling on PPI in 2011 and the volume of complaints was then overwhelming. Lenders were not geared up so they often just paid up without looking too closely.

“Great” you say!  Well, that was then.

The banks start making it harder and getting it wrong

As the banks hired large teams to handle complaints the numbers of successful claims and the amount paid out fell. In fact, the Financial Conduct Authority says they had to intervene to make sure that banks were assessing claims fairly. Things have improved, but some consumers have reported finding claiming harder over the last year.  There are reported cases of customers being hassled with calls by the banks and some banks making it harder to get information needed to make a claim. Moneysavingexpert reported that in April 2016, the ombudsman favoured the consumer in 70% of claims which they looked at. The banks had already rejected these consumers so they still appear to be getting it wrong.

Efforts to end consumers claiming PPI

In our view, the regulators also don’t always act in the consumer’s interest when it comes to PPI. The banks and the government have had enough of PPI and this seems to be putting pressure on the regulators. They would like to limit the ability to claim (with a deadline) and make it harder to get help from a PPI claims management company. After all, the government had to step in and bail out the Royal Bank of Scotland and Lloyds who have had some of the biggest PPI reclaim bills. The cost to the banks has indeed been staggering, but let’s not forget where that money came from; consumers paid the premiums, commission and interest on top (often without realising).

The regulators have also made some, shall we say, surprising rulings and statements.  These have affected the amount of compensation you could get unless you know about these rules and can challenge them of course.

So what?

The point is that banks may not always pay out when they should or what they should. Again, this is the FCA’s view not just ours.

What many people also don’t realise is that the Financial Ombudsman Service (FOS) is not a consumer champion – that’s not their role. This is their own description: “If a business and a customer can’t resolve a complaint themselves, we can give an unbiased answer about what’s happened. If we decide someone’s been treated unfairly, we have legal powers to put things right.”  The key here is that the FOS must be unbiased and judge a complaint on the evidence presented both by you as the consumer and the company about who you are complaining.

That’s right and proper, but we’ve had personal experience of how this can go against customers. Before we started FairerPPI we had to make a complaint (not for PPI) ourselves about a company which denied mis-selling over the ‘phone. The company did not keep recordings and the Financial Ombudsman Service (FOS) decided that without such evidence the complaint couldn’t be supported. Furthermore, once the Financial Ombudsman Service (FOS) has ruled, there is no other way to complain. That’s it unless you want to take the bank to court. So preparing and arguing your complaint properly is actually quite important.

Conclusion

If you have plenty of time and you’re feeling confident, you can probably dig out all the information you need and claim PPI yourself.

If not, consider using a PPI claims management company so that you have someone on your side. A good claims manager will know what claims succeed and when to push harder if a claim is initially rejected.

Finally – forgive us if this doesn’t sound like you – it’s worth considering if you will get round to claim PPI yourself. Reclaiming PPI has been possible for many years now. There is now momentum to introduce a deadline. Is getting some help the difference for you between claiming what’s yours and missing out altogether?

Yes, there’s a cost for getting help from a PPI claims management company. It can be very high, so do shop around to get value and a fairer deal. If you’d like us to look into your claim for you, please just fill out the form. Feel free to get in touch if you have questions.

Image credit: 7974 Cleveland Way signpost (edited) – by photoeverywhere licensed under a Creative Commons Attribution