There have been a number of mis-selling scandals in the UK financial services sector in recent years. First it was excessive bank charges, then payment protection insurance and card protection insurance. British account holders have been able to claim back billions of pounds from banks, building societies and loan companies, and a whole industry has sprung up around helping people make their claims.
Process of Claiming for Financial Loss
There are lots of websites and impartial, not for profit organisations which can help you without charging you for the privilege. There are four basic steps which you need to follow when making a claim for PPI or other forms of financial compensation.
- Make sure you had the cover.
It may sound obvious, but you can only claim for a refund of PPI or another charge which you paid in the first place. If you have your original loan or credit card contract or paperwork that makes a good starting point, if not you can ask for a copy from the organisation concerned. Some of them may charge you £1 for supplying you with copy paperwork.
- Was it mis-sold?
There are various categories of mis-selling and you have to prove that your experience falls into one of the categories. These include things like the salesperson not making it clear that the insurance was optional, heavy handed sales techniques, giving you a form where you actively had to untick the box to opt out of insurance or when retired people were sold unemployment cover. Take time to read through the various options and decide which best fits the way you were sold the policy.
- Contact the financial organisation
Once you have established that you have had the policy and that it has been mis-sold, then write to the company concerned and ask them to refund what you paid. Some banks will accept claims made over the phone but most will ask you to put it in writing. There are lots of templates online to help you do this, so make sure you use a reputable site.
- Accept the offer
Once the bank has received your claim, they will make you an offer to settle your claim. In most cases this is the end of the process and the claimant is happy with the offer received, but if you run into difficulties with the bank, then remember that the Financial Services Ombudsman is there to act as an impartial referee in cases where you cannot reach an agreement.
Benefits of Using a Claims Management Company (CMC)
You have a choice when it comes to making your claim for mis-sold PPI or other forms of financial compensation as you can either do it yourself, or ask a claims management company to do it for you. Financially, the best option is to do it yourself, as the typical fee you pay when your claim is successful is around 25% to 30% of the money you are awarded. But if you just don’t have the time to write letters or are treating the money you get as a bonus, using a CMC probably offers some advantages. But for the vast majority of people, making the claim yourself is the better option.