Claims firms coining it in from PPI compensation
Claims management companies will rake in more than £12.6m in fees this year from victims of the bank payment protection insurance mis-selling scandal.
The firms target victims with offers to manage compensation claims in return for a quarter of the payout. With average pay-outs standing at £4,534, the firms earn £1,584 for each successful claim through the Financial Services Compensation Scheme (FSCS).
But using the scheme is free while using a claims firm will not noticeably improve your chances of success.
It means many victims are paying handsomely simply to have someone else complete a few forms and cope with the minimal red-tape.
"While it may seem reassuring to have someone else do the paperwork, consumers should not be daunted by the process of making a claim," advised Mark Neale, left, chief executive of the FSCS. "Claims companies take a significant part of the possible pay-out and are no more likely to make a successful claim than consumers can on their own."
Subscribe to Independent Premium to bookmark this article
Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Premium subscription today.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies