Claims management companies are busy fighting for customers who were mis-sold PPI by financial service providers - taking the fight to lenders who took money unnecessarily from their customers using dubious, unethical sales practices.
Payment Protection Insurance, in the right hand, is actually pretty good insurance. It covers people in the event that they experience the economic doldrums brought about by losing their job, suffering an illness or being involved in an accident.
Borrowers have managed to claim on PPI to continue paying their mortgage, credit card or loan, and it appears that when it was sold to a borrower who ticks all of its boxes and fully qualifies for its terms, PPI does indeed prove to be beneficial to that borrower should they need to use it.
The Perils of PPI
However, this beneficial aspect of the PPI policy - as you may have heard - has been lost on the majority of customers who were sold PPI alongside their loan, credit card or mortgage agreement. As it turns out, millions of consumers were fraudulently sold PPI, and for them it is utterly, ridiculously, useless.
So why did the banks and other lenders sell the policy to people who couldn't use it? Well, either because it was just a critical error in judgement on the part of banks or maybe (just maybe) it was due to the fact that it generated billions of pounds in profits for the financial institutions.
As people have become more aware of mis-sold PPI, the amount of complaints they've made to banks which demand compensation in the form of premiums plus interest paid back to them has proliferated rapidly.
The lenders guilty of the PPI scandal have set aside billions of pounds in provisions to ready themselves for the constant stream of PPI complaints, already well aware of the serious consequences of mis-selling the policy, the redress paid back to customers already reaching 1 billion in 2011 and there are no signs that winning compensation claims will not continue to flourish in the coming years.
Companies to Manage your Claim
A PPI claims company should be chosen carefully by anyone who wishes to use their services to make a claim on their behalf. More commonly known as Claims Management Companies (CMCs), they seem to be absolutely everywhere at the moment - some of them reputable, but a lot of them simply cashing in on the whole mis-sold PPI debacle to make some quick money and charge people extortionate amounts of money for their services.
The best course of action is to choose a reputable company, one which has a good track record and is regulated by an official authority. Make sure you read the small print - especially on the No Win No Fee services provided by the CMC and make sure you are completely aware of any costs that will be incurred over the length of the claiming process, especially if the claim needs to go to trial.
Other than that, just make sure you are getting a price that you feel is fair for the hassle that a CMC can save you and it could be worth your while to enlist in their services rather than taking the free option and claiming by yourself.
Get your money back - it's yours, and the banks have it. Don't delay!