Tuesday, May 31, 2011

PPI Claims: Should you go it alone?

There’s been plenty of scaremongering in the press in the past fortnight regarding the use of claims management companies for making PPI claims. We’ve already seen how the public can be taken advantage of by money hungry banks; my question is how can they now be trusted to repay what’s owed to their PPI claims customers if there are no legal officials involved? Although claims management companies do charge a fee for their services, like any professionals in their field they also have the tools to claim the maximum possible amount for those they work for. This includes financial knowledge and a thorough approach to investigating exactly what’s owed to clients in PPI compensation – many of whom might have taken out several PPI policies which they were unaware of. The likelihood of a lender drawing attention to these additional policies is slim, as it means they will be forced to pay out more in PPI compensation. Whereas this is not in the interests of a lender who has mis-sold PPI, it is in the interests of a claims management company – this is because they will only win money if you do too. 

PPI claims management companies are methodical in their approach and will challenge any offer of compensation which does not include the interest paid on a loan or overlooks a person’s borrowing history – in short, they tend to explore all angles when dealing with claims and this inevitably leads to claiming larger sums of PPI compensation for those involved.  

All this is sobering advice for those who are going without legal aid; there’s no evidence as yet that what the banks offer via the Financial Ombudsman Service is in line with what’s really owed to someone who’s been wrongly sold PPI, and plenty of evidence to suggest that if lenders can offer less, they will. Just how hard an already inundated body such as the FOS is going to work on behalf of someone making PPI claims isn’t yet clear and we don’t know what the fruits of their efforts will be on a grand scale. 

I would therefore be less worried about paying a fee to a trusted professional and more worried about attempting to go it alone and negotiate PPI compensation without legal advice. 

There is potentially thousands of pounds at stake for each victim of PPI mis-selling; why risk letting the banks win yet again?

The RTA Claims Portal: 1 Year On

Most readers will know that I was a vocal opponent of the RTA claims portal when it came into being more than 12 months ago. The portal is designed to be a simple mechanism entirely online that allowed both road accident solicitors and motor insurers to communicate via a database rather through expensive and wasteful correspondence which bogged everybody down. Effectively the plan was to turn simple road accident cases into conveyor belt processed claims.

At its inception in April 2010 it was frankly - a complete shambles. The system took at least 6 weeks to bed down. The IT didnt work, the training didnt happen, the industry wasnt prepared and it was very difficult to think of any positive things to say about the whole concept.

So 1 year into what I would call full on business workflow ...how are things now?

Well, I have to admit that this portal really isnt all that bad. Yes it has dumbed the industry down considerably, yes it has automated our world to a degree but the pro's far outweigh the con's in my opinion.

We are settling claims at the lower end much quicker - we are not having to deal with poorly trained insurer staff (because we no longer need to speak to them in most cases) and finally we are getting interim costs paid upon admission of liability which has injected cash into the business well ahead of settling the actual claim.

The IT works better and in fact has recently been upgraded.

All in all - things are pretty good in the RTA world and rumours of its demise were indeed grossly exaggerated.