Claims Management Companies have been around for a while now and some people might view them as “ambulance chasers”. Their tag line is normally:
No Win, No Fee
I suppose that is where the idea started out years ago with legal companies set up to specialise in health claims where there was some suspected form of medical mispractice or mistakes made by hospitals or doctors.
Remember The PPI Claims?
No-one escaped hearing the adverts on TV and radio about claiming back your PPI and thankfully that era is finally over! Mind you, there were a lot of people that did very well out of these claims and the banks had to pay out millions of pounds because of their own mistakes.
No there are more things you can claim on and the list seems to be endless. If you were mis sold an investment product, a mortgage, insurance and the latest one is claiming off the Payday Loan Lenders for excessive charging of fees and interest.
The Shoe Is On The Other Foot
So, this is an interesting development. The hunter becomes the hunted!
The Financial Conduct Authority is now investigating these Claims Management Companies for charging excess fees themselves!
These Claims Management Companies can take all the hassle out of making these claims, as they do all of the work for you instead. They still work on a no win, no fee basis, but apparently some of these companies are holding onto up to half of the compensation payout! They are also not being upfront and clear about how much they are going to charge right from the start and that is why the FCA are now getting involved.
I think this is a good thing, as they also need to be fair with people as well. The FCA are going to recommend a maximum amount that these companies will be able to charge you for their services. It is thought to be in the region of 15% to 30%
Do It Yourself
Whilst you can employ the services of Claims Management Companies, you can always do it yourself by making a complaint for free using the Financial Ombudsman Service.