October 21, 2009 19:01 ET

Stake Your Own Claim, Says Which?

LONDON, UNITED KINGDOM--(Marketwire - Oct. 22, 2009) -

Strictly embargoed until Thursday 22 October at 00.01 hrs

Some claims management companies are discouraging consumers from claiming back excessive bank charges or mis-sold payment protection insurance (PPI) by themselves, reveals an undercover investigation(i) by Which? today.

Researchers who posed as customers interested in making a claim found that almost a third of firms didn't meet Which? benchmarks(ii).

Only 10 out of 38 companies asked about mis-sold PPI passed the Which? test. 12 of those that failed implied the researchers would be better off using their company rather than claiming independently, even though an independent claim costs nothing. This breaks rules set by the Ministry of Justice (MOJ)(iii).

A further 16 firms professed to have successfully claimed back money in 90 per cent or more of cases without properly qualifying this, while five companies couldn't say how they were regulated.

Advice about excessive bank charges claims was better, though some firms discouraged researchers from claiming themselves. Comments included "You can make the claim yourself but you will have to wait till maybe next year... (we can do it) straight away". One company didn't mention the ongoing bank charges court case.

Claims management companies typically charge a commission of 25 per cent, plus VAT, if a claim is successful and many also charge upfront fees.

Martyn Hocking, Editor, Which? magazine says:

"Claims management companies have some very crafty ways to encourage you to use them, from exaggerating their success rates to suggesting they'd be more successful at getting your money back than if you did it yourself.

"Not only are the firms breaking rules in some of these cases, but making a claim for mis-sold PPI or bank charges is a simple process, and you can do it yourself for free."

Customers who feel they've paid excessive bank charges or have been mis-sold PPI can skip the middleman with Which? tools, template letters and information at www.which.co.uk/bankcharges and www.which.co.uk/ppiclaim.

Notes to editors

The full article "Claim companies' failings exposed" appears in the November 2009 issue of Which? magazine. For further information, the full article, a copy of the magazine or an interview, please contact Nicole Gross.

(i)In August 2009, Which? made 68 calls to claims management companies posing as potential customers. 38 of the calls were about PPI and 30 were about bank charges. Which? used a combination of the Ministry of Justice rules and our own standards to check whether firms were acting fairly and reasonably, ensuring that information wasn't misleading and advising clients of the ombudsman scheme.

(ii)To pass the Which? benchmark, companies had to:

- Tell the Which? undercover researcher that they could pursue the claim themselves and not suggest that they would have a more favourable outcome if they opted to use the claims management companies

- Be clear and honest about success rates, how they charged fees and who the company was regulated by

(iii) The Ministry of Justice rules state that: Where a claim is one that falls within the province of the Criminal Injuries Compensation Authority, the Financial Ombudsman Service, the Housing Ombudsman Service or any other recognised dispute resolution procedure, the business must not suggest that a claimant will have a more favourable outcome if he uses the services of the business.

Which? is the leading independent consumer champion in the UK. We provide impartial, expert information on products and services in our magazines, books and online to help consumers make more informed choices, and we campaign on issues that matter to all consumers, from food to finances, health to estate agents. For more information on how we can help you, visit http://www.which.co.uk or http://www.which.co.uk/campaigns

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