Do you feel that you’ve been mis-sold payment protection insurance, or loan insurance? Are you thinking about trying to reclaim your PPI premiums and interest paid? If you decide to do this through a professional claims management company, here are 12 things to consider:
1. Do I have to pay any upfront fees?
You should never pay an upfront fee. The reason for this is very simple. If you do pay an upfront fee your interests and those of the Claims Management Company (“CMC”) are mis-aligned. A CMC has little incentive to work for you if they have already been paid a fee. If no fee has been paid the interests of both parties are perfectly aligned because both parties will not receive any money unless the CMC wins your case.
2. How much are the fees?
This should be no more than 25% of the win amount + VAT. Be careful though, some CMCs apply their fee to the total value of the policy. If this is a current loan then it will include premiums that you have not yet paid. If you sign up with a CMC that operates like this they could leave you out of pocket because you may not be able to pay their fees from the compensation that they recover from you.
3. Is the work done on a no-win no-fee basis?
This is the basis on which the work should be done. This means that there is no risk to you in making the claim because the fee is only payable if the CMC is successful.
4. Does the CMC have a minimum fee?
Most will and this is reasonable. However, make sure that if the amount of your compensation were to fall below the minimum fee you would only be charged half of the compensation you received. You don’t want to be paying a minimum fee that is more than the compensation that you’ve received and therefore be in a worse position than you were before signing up with the CMC.
5. Are there any hidden charges?
Make sure that there are no hidden charges in the terms and conditions. Some CMCs hide charges for administration fees/document handling fees in their terms and conditions.
6. Is the CMC regulated by the Ministry of Justice?
You should never work with a CMC who is not regulated by the MoJ. Handling claims without a MoJ licence is a criminal offence. You can check by looking at the MoJ’s website and searching under the CMCs name.
7. Will my claim be dealt with by the CMC?
Some CMCs sell your claim on to other companies. It is important to check so that you know exactly who will be dealing with your claim and how you can contact them.
8. What is the qualification of the person who will be handling my claim?
Some CMCs are using poorly trained staff to process claims. Make sure that the staff have adequate training and experience.
9. Will I be kept fully up to date with the progress of my claim?
CMCs should let you know as soon as they have received your instructions to act and any loan documents you may have sent them. They should also keep you fully updated with any responses from the lender.
10. Will I be able to speak to someone about an offer that is made to me?
You should be able to discuss an offer that is made to you with a member of staff who has the relevant expertise and training to fully explain the offer to you. You should not be put under pressure to accept an offer that you don’t understand or is not in your best interests.
11. Will I have to give my bank details to a CMC when I first speak to them?
You should never have to do this. There’s no reason for a CMC that operates on a no-win no-fee basis to be asking for your bank details at the start of the process.
12. If I’m unhappy with the service how will I be able to cancel my contract with the CMC?
You should always write to a CMC to notify them that you want to cancel your contract. However, this contract will not be cancelled until the CMC then confirms it with you.