THE INSURANCE mis-selling scandal has become a “cash bonanza” for claims management companies looking to exploit bank customers, according to consumer rights advocates Which? magazine and MoneySavingExpert.com.
They hosted a meeting yesterday, where major providers of payment protection insurance (PPI) and regulators discussed the scandal, in which thousands of borrowers were inappropriately sold useless insurance.
Which? publishing data suggesting that a quarter of people do not know how to file a complaint themselves to get their money back and that claims management companies, which offer to file it for them, often take a 30 per cent fee.
Banks say that the companies are adding to the headache of going through thousands of complaints and yesterday pledged to make it easier for individuals to claim.
The head of Charter UK Paul Clark, who advises banks on complaints software, said: “Up to 25 per cent of the claims banks are receiving from [these] companies are from claimants who never had a PPI policy in the first place.”