Consumer organisations call for regulation of PPI claims
LEADING consumer organisations yesterday joined with banks to demand the government institutes tougher regulations on claims management companies (CMCs).
Mis-selling scandals involving products such as payment protection insurance (PPI) have created a mini-industry of firms that say they will help consumers access compensation.
But some of these firms retain up to a third of the payout, even though consumers could process their own claim for free.
The letter, sent to Justice Secretary Ken Clarke by Which?, MoneySavingExpert.com and the British Bankers’ Association, calls for the government to seek to stamp out bad practice.
“It is essential that urgent action is taken to encourage better supervision, self-regulation, tighter regulation and enforcement against CMCs by the Ministry of Justice,” said the letter.
“We believe the Government has a critical role to play to help consumers and the industry by ensuring third party complaint handlers are properly regulated and bad practice is stamped out,” it continued.
Campaigners say that with an average PPI payout of around £2,750, up to £825 could be retained by the CMC.