New research conducted by the Citizens Advice Bureau (CAB) shows 3 in 5 people surveyed were pestered by calls, emails and spam texts from claims management companies within a week.
CAB’s new report ‘The Claims Pests’ exposes how claims management companies harass people in their homes in order to get a £2 billion cut of payment protection insurance (PPI) compensation.
PPI was originally sold alongside loans, mortgages and credit cards, wrongly in many cases, to cover repayments if people became ill or lost their jobs.
The report brings together a wealth of evidence from across the Citizens Advice service including a poll of 300 consumers who visited www.adviceguide.org.uk, a detailed analysis of 288 client cases about problems with claims management companies and PPI, figures from the consumer helpline and details of financial losses from high fees.
The new figures found 9 out of 10 surveyed had been contacted out of the blue by a claims management company within the last 12 months. 72% were about making a claim for PPI.
You can claim yourself for free
Citizens Advice is urging consumers to put the phone down on these cold callers and go straight to their bank to make a claim. Claims companies take around 25% of a person’s successful PPI claim in charges. Data from Citizens Advice Bureaux across the country found people were spending, on average, over £1,100 in fees for something they can do themselves for free. One CAB even saw a client who paid over £4,000 in charges.
And some are charging up front costs of £600 – without being clear if the consumer will get any sort of payout. Citizens Advice is also calling for a ban on up front fees as firms often fail to deliver on claims, making claimants worse off than before. One in five CAB clients were lead to believe they can make a claim for PPI without ever having or being mis-sold a policy.
These excessive costs are pushing people into hardship with 1 in 4 CAB clients in debt or financial trouble after forking out the fees.
Top tips to give cold callers the cold shoulder
• Ignore spam text messages.
• Put the phone down on marketing telephone calls.
• Be careful how you share your personal contact details.
• Forward spam texts to your mobile provider for them to take action: 7726 for Everything Everywhere or O2, 37726 for 3, 87726 for Vodafone.
• Report any scams to Action Fraud online.
• Make a claim for mis-sold PPI yourself by contacting you bank directly.
• Get advice about claims management companies from the Citizens Advice consumer service on 08454 040506 (or Welsh speaking 08454 04 05 06), online at www.adviceguide.org.uk or from your local CAB.
• Complain to the Information Commissions Office about spam text on 030 3123 1113.
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