Citizens Advice is urging a ban on cold-calling by claims management companies after a survey found nine out of ten people have been contacted in the last year.
• Call for claims management companies to be banned from Citizens Advice
• Survey reveals that 62 per cent are “pestered by calls, e-mails and texts”
A month-long survey found 62 per cent of people had been “pestered” by calls, e-mails and spam texts within a single week, with 72 per cent of those from firms seeking a cut of the £2 billion payment protection insurance (PPI) compensation fund, according to the consumer advisory service.
A wider report based on a survey of 300 people and analysis of 288 client cases about problems with claims management companies found 90 per cent had been contacted “out of the blue”.
Citizens Advice is urging consumers to put the phone down on PPI cold-callers and go straight to their bank to make a claim.
The report found that the companies take around 25 per cent of a successful PPI claim in charges, with customers spending on average more than £1,100 in fees for something they can do themselves for free.
One Citizens Advice Bureau saw a client who paid more than £4,000 in charges, while some firms were charging upfront fees of £600 without being clear if the consumer would get a payout.
One in five Citizens Advice clients was led to believe they could make a claim for PPI without having or being mis-sold a policy, with one in four ending up in debt or financial difficulty after paying fees to a claims company, according to the report.
Citizens Advice said its consumer service handled more than 4,800 queries about claims management companies offering PPI compensation services in the last seven months.
Citizens Advice chief executive Gillian Guy said: “People should give cold-callers the cold shoulder and go direct to their bank if they want to make a claim for PPI.
“We’re advising them to ignore any unsolicited calls, texts, letters or e-mails from claims management companies.
“These firms are intimidating people in their homes and wasting a lot of people’s time, and in some cases money when they make a claim and nothing comes of it.
“They’re not upfront with their customers about fees, are charging excessive costs and aren’t getting people the payout they deserve.
“Banks can stop their customers falling victim to these companies by doing more to tell them about mis-sold PPI and the compensation they’re entitled to.
“But it is vital that the regulator introduces tougher measures to protect people from predatory claims firms.
“People were endlessly pestered about making a claim for an accident. Now it is PPI, and there will undoubtedly be another consumer crisis they try to exploit.”