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?

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