iSmart Solutions

iSmart Solutions

July 17, 2012 07:30 ET

Why People Don't Claim

LONDON, UNITED KINGDOM--(Marketwire - July 17, 2012) - News around the mis-selling of PPI (Payment Protection Insurance) is something we see regularly these days. The Financial Ombudsman Office predicts it will see 285,000 claims in 2012.

However, we do not hear much about the people who could claim, but don't. Although no specific research has been done around this area, anecdotal evidence suggests that there are a number of reasons why people do not put in a claim. Interestingly, the primary reason - based on customer feedback - is the fear of retaliation by the financial provider. This is particularly difficult because banks are in a powerful position. Everyone has to have a current account and the majority of people borrow through banks. Customers expressed a fear that their loan could be recalled or their credit cards cancelled.

This is an unfounded fear. Banks cannot do this and - if they want to retain their customers - certainly would not. But the industry is not voicing this. There is a real need for increased transparency, and for the industry to let customers know that there will be no retribution for claiming what is rightly theirs.

On the other side of the equation, people are not following through on their claims. Ryan Horne, Managing Director of iSmart, a market leader in PPI claim resolution, commented that a substantial number of the enquiries received within the organisation go no further - despite information being sent out. Could it be the "coffee table effect"? People receive the information, take a quick look, put it on the coffee table, intending to get to it later, before forgetting about it completely? Quite possibly. But people are missing out on something which is rightly theirs, and that they have paid for - whether they feel like they have actually exchanged money or not.

Many people believe that they do not have a claim. But if you had a financial transaction which involved borrowing money - such as a loan, mortgage or credit card - in the last 10 years, you could have been mis-sold PPI. But you need to go through the process to find out. You can do this yourself, or you can appoint an agent to act on your behalf. Horne comments: "People come to us because we can help them through the process and manage their claim on their behalf - all they have to do is complete the initial paperwork and we look after it from there."

Financial organisations have set aside huge sums of money to compensate those of us who were mis-sold PPI. For the sake of completing a couple of forms, people could be in line for a substantial payment. Some claim agencies - based on average refunds - advertise £3000 as a possible outcome, and whilst each claim has to be individually assessed, there cannot be many households out there who would turn down that sort of payment.

Contact Information