Millions of customers have turned to claims management companies to file PPI claims against banks in the UK. Many of these customers have been happy with the services they have received, but others feel that the companies they worked with have used abusive practices. Some claims management companies have come under scrutiny for their outreach strategies. The Minister of Justice (MoJ) recently announced that it will be going after any claims management firms that use predatory marketing practices.
Banks Await Solutions
The country’s banks are some of the least
sympathetic companies. Many people were initially ecstatic when they were
forced to repay PPI claims. However, many customers were soon plagued by spam
text messages and late night phone calls from claims companies promising to
help them get their money back. The more unscrupulous claims management firms
have since taken a lot of flak for these tactics.
The banks are equally upset with the
tactics that some CMCs have used. They have been forced to review thousands of
claims that were filed by these firms. Many of the claims were upheld by the
Financial Ombudsman Services, but others were found to be bogus. The banks said
that financial regulations need to be revised so that these practices do not
persist.
Banks Convene With MoJ
Representatives from the British Bankers
Association held a meeting with Ministry of Justice officials earlier this
week. Anthony Browne, head of the BBA, said that the aggressive marketing
practices some firms employ are harmful to both citizens and the banks. Browne
said that some CMCs go out of their way to take advantage of poor people.
He said that these people tend to be more
inclined to work with a PPI claims company that promises to help them earn back several thousand pounds or
more. Browne said that these people are often exploited by claims firms that
charge ridiculous fees for the quality of the services that they offer.
Ideas Proposed
The Ministry of Justice and the BBA have
discussed a number of things that will need to be done moving forward. Some of
the resolutions they feel are needed include:
- Placing restrictions on texting and phone calls
- Regulating the marketing messages CMCs are allowed to use to avoid misleading customers
- Ensuring CMCs are more transparent with the types of services that they provide
