The wrongful selling of payment protection insurance is well known. Yet those who rightly deserve to be compensated are now the unwilling target of a gang of claims managers who intend to cream off victims’ money.
At stake is a substantial sum: almost £9bn has been set aside by institutions for the millions of consumers affected.
Those who have been mis-sold PPI and would like to have the help of a third party complaint handler need the assurance that such people are properly regulated. The Ministry of Justice has taken some steps but further action is urgently needed.
“There is significant evidence of rule breaking within the claims management sector,” says the British Bankers’ Association, Which? and website MoneySavingExpert.com. The influential trio says the claims handling industry has grown significantly but its regulation and supervision has not kept up.
A quarter of consumers do not know that such handlers take a fee and only half know that using such a person will be no more successful than making a claim themselves.
“The result is that consumers are losing out now and will continue to do so unless action is taken,” says the trio.
Misleading advice, unfair contract terms and a lack of transparency on fees are all too common. There is little anyone affected can do to gain redress when this occurs.
Since most funds set aside for PPI redress is likely to be distributed over the next year, it is essential that urgent action is taken to encourage better supervision, self-regulation and enforcement action against claims management companies by the Government.
For some unknown reason, the proposed consultation by the claims management regulator on the ‘conduct of authorised persons rules’ is being delayed. Yet any delay – even by a week – postpones the much needed changes to drive out the poor practices adopted by some claims handlers.
It can only lead to further consumer problems and additional costs across the industry and Financial Ombudsman Service.
Perhaps in place of attending cricket matches, Justice Secretary Ken Clarke could use his time to help insurance victims.