Five Questions About: Claims managers

Been plaguing you with annoying texts and phone calls too?

Well, yes, but that's not why they're in the news this week. In fact the latest move from the Ministry of Justice is good news for consumers.

Has it banned claims management firms?

No. But from next year it is passing responsibility for dealing with complaints about the firms, which handle compensation claims in areas such as payment protection insurance mis-selling and personal injuries, on to the Legal Ombudsman.

Isn't that just another regulator?

Yes it is but, crucially, it has the power to force firms to compensate people they may have mis-sold to or misled. The Legal Ombudsman will be able to force claims firms to pay back up to £30,000 per customer they have disadvantaged.

Crikey! Doesn't that mean firms may have to pay out a packet?

Estimates put the total bill for rogue firms in the millions. Of course, not all claims firms are disreputable, as some have helped people get compensation.

So should I use a claims firm to make a claim against a claims firm?

No. Most claims can be handled perfectly well by the average person. Doing so could save you paying fees of a quarter of whatever compensation payout you are eligible for.