A recent report has highlighted how many people who have successfully claimed compensation for mis-sold PPI on their personal loans are paying out a large chunk of their compensation simply because they went through a third party. Since the banking industry lost its court battle over the controversial Payment Protection Insurance last year, a rising number of people have been putting in claims.
However, although the claims process is a relatively simple one there are many people who are using third party claims companies to pursue their claim for them and then having to pay a fortune to these companies for something that they could essentially have done themselves with relative ease and speed. Many of those who are receiving compensation are paying around 25 percent of the cash to the claims companies according to the Financial Services Compensation Scheme.
The figures have been put together over the past few years and have highlighted just how costly it can be to use the no win, no fee firms that have sprung up all over the place. Many of those who feel they are entitled to compensation have been tempted by these firms’ advertisements, as they make it sound quick, simple and cost effective to go through them. However, the success rates of those who go through the claims process themselves compared to those who go through a claims firm is almost the same, with only a few percent between the two figures.
FSCS chief executive Mark Neale said: “Claims management companies take a sizeable part of the pay-out and are no more likely to make a successful claim than consumers can on their own. Consumers should be aware claiming compensation from the FSCS is free and the process is not difficult.”