Claims management companies could scoop £2bn from payment protection insurance mis-selling claims according to consumer group Which?.
With an average payout of £2,750 for mis-sold PPI, claims management companies are taking a standard 25 per cent as their fee, equal to £825. "Anyone who thinks they may have been mis-sold PPI should complain directly to whoever sold it to them. By going to a claims management company, you'll pay what could be a lot of money for something you can easily do yourself," said Peter Vicary-Smith, Which?'s chief executive.
The group is calling on consumers to use its free online PPI complaints tool – www.which.co.uk/ppiclaim – to make the process easier.
It is also urging any consumer whose bank rejects their complaint to go to the Financial Ombudsman Service (FOS), which is free to use. The FOS finds in favour of the consumer in instances of PPI mis-selling in three out of four cases.
Meanwhile, Lloyds TSB has said that it may attempt to claw back some bonuses made to top executives involved in the mis-selling. Lloyds Banking Group alone has set aside £3.2bn to settle its PPI claims.