The truth about using a good CMC (Claims Management Company) rather than doing it yourself.
*In this blog I’ll be overviewing the common viewpoint – that you should claim your PPI by yourself – and the 7 statements most commonly used to back this up.
Why has this advice never changed?
I’ve read so often now – over and over again – advice commonly given in regards to making any PPI claim by yourself.
The advice has basically never changed across more than 10 years.
But here’s the thing – the PPI sector HAS changed across that same time period.
So advice that stays the same, about something which DOESN’T, has to be challenged, right?
And in that spirit, let’s look at 7 typical statements given in the name of ‘advice’. And challenge them.
But before I start.
Let’s be clear – you CAN do it yourself. Okay?
And if you insist, there’s absolutely nothing wrong with that – go ahead, knock yourself out, be happy, have a field day.
You’re reading this. It’s 2017.
And you haven’t claimed yet – by yourself.
So let’s look at 7 common statements.
1) You can do it yourself for free.
Okay, yes it costs you nothing in regards to paying out a percentage of the fee. But free?
Well, it will still take a portion of your time and unless you value yourself at zero, that carries a notional cost.
That’s simply a fact, which even well-known ‘money advice’ websites absolutely fail to recognise.
2) You have no greater chance of success with a CMC. And guidelines state that CMC’s shouldn’t suggest that.
This one sounds really good.
Until the obvious is pointed out.
Which is – the banks have rejected claims they shouldn’t have; have used calculations incorrectly; have failed to repay what they should have.
How on earth is the ‘normal’ person supposed to know when to challenge a refund?
Or a rejected complaint?
A really good CMC could be better positioned to do this.
3) Many firms use similar templates to those available for free.
Yes. That can be true.
What does it matter – it’s just a template. It’s what you do with it next that counts, obviously!
4) The firms charge a fee, often around £30% or so.
I really struggle with this – why on earth would they NOT charge a fee? When your plumber does work for you, they charge a fee don’t they.
A great CMC will clearly define the charging structure. And the best CMC’s are by definition often not the ‘cheapest’.
They’re working for you, working to get the best result. Simple.
5) The CMC will still want its fee if you have offset.
Offset is when the refund goes into paying off or lowering existing debts with bank which has awarded the refund.
Fact – you have still benefitted. Fact – they have still earned the fee.
However, any good CMC will have a clearly defined fee structure for this provision.
So you have the options beforehand, to make your best decision.
6) Claims companies charge upfront fees.
Not now, they don’t. If you find one that does, report them.
Otherwise walk away – NEVER engage.
In 2017 this point really is terribly outdated but still gets bandied around.
NO GREAT CMC will charge you anything upfront. They will be ‘no win no fee’.
7) You sign up, but then have to pay them if you decide to do it yourself.
So, you carefully decided to engage a great CMC then decided to ‘just walk away’?
And morally, it’s the CMC who are disreputable?
I don’t think so. I think it’s fair that an individual is responsible if they have engaged with the CMC. However, any great CMC will most likely only charge a small fee for the work up to that point.
It will be in the terms – the ones you read when you engaged.
What has changed in the PPI sector?
So the advice is you can do it yourself.
Below, is a random selection of snippets that show how the scandal has deepened, and how the banks are continually avoiding straightforward and honest redress.
It’s the depth and the complexity of the scandal that has changed.
Now, regarding that advice, ask yourself – is it as straightforward as they all said it was a few years ago?
Alternatively, you could always take that advice and go direct.
And trust the same organisations who have conducted themselves as follows (see below). It’s up to you.
The Lion’s Den.
- Lloyds, and the ‘legal loophole’ reports on BBC Radio 4.
In a Radio 4 programme – and in other reports – around March 2014, the bank was accused of cutting payments by tens of millions of pounds in mis-sold PPI using an obscure loophole that is allowed by the financial regulator.
- Lloyds – fined for ‘massive delays’. In February 2013 Lloyds Banking
Group was fined £4.3 million for massive delays in paying back mis-sold PPI.
- Co-op – ‘unfairly putting complaints on hold’. In January 2013 The Co-op
was fined by the regulator for unfairly putting complaints on hold.
- FCA – 2.5million complaints unfairly rejected or underpaid. In August
2014, the FCA revealed that bank and credit card providers would reopen 2.5million claims.
- RBS – Reports show that Royal Bank of Scotland has paid out £6.4bn in misconduct charges.
- Lloyds – Lloyds Banking Group paid £14bn in charges between 2010 and 2014.
- Barclays – Reports show that Barclays has paid out £7.3bn in misconduct charges.
- The mis-selling of endowment mortgages – banks to set aside £1.9bn between 2002 and 2006.
- BBC, ‘You & Yours’ radio programme – underpayment of refunds.
BBC researchers found (2016) that incorrect calculation of PPI compensation is common among banks, and alleged that it was deliberate. Supported with evidence of miscalculated PPI refunds paid to customers of Lloyds, Barclays, MBNA and Capital One.
- The MBNA example – less than half.
The radio program also included an example of a miscalculation in which an MBNA customer had received a PPI refund of £5,800, but when his charges and compound interest were also included, should have received a refund in excess of £13,000.
- Record fines for Clydesdale Bank & Yorkshire Bank, ‘handling errors’. The FCA slapped both Clydesdale Bank and Yorkshire Bank with a combined £20.6 million fine, the largest of its kind to that date, errors made in a period lasting more than 2 years (2010-13).
Always do your due diligence when choosing a CMC – see my blog on this for detailed help in choosing a great CMC.