PPI claims firms: tougher action needed says Which?

Tougher action is needed to stop people being plagued by firms pushing them to make payment protection insurance (PPI) and personal injury claims, consumer campaigners said today.

Which? found that seven out of 10 consumers have been cold called by companies in the last three months and two-fifths have received a nuisance text message.

The consumer group urged regulators including Ofcom and the Office of Fair Trading (OFT) to set up a joint taskforce to pull the plug on “intrusive and distressing” calls and texts.

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Which? said they should start by clamping down on the PPI and personal injury claims industries, which are responsible for the majority of nuisance calls in its survey.

Other common unwanted calls to people’s landlines included those from firms selling services such as double glazing and mobile phones, market research companies and calls which were completely silent.

The consumer group said that another investigation it carried out found that one quarter of its members who made a claim on their car insurance were contacted by a claims management company (CMC) within three months.

Many of them were bombarded by repeated messages - with more than a fifth receiving at least 10 texts and one in eight people who were contacted saying they had received 10 or more phone calls.

The Transport Committee is currently investigating the extent to which bogus and exaggerated whiplash claims push up the cost of car insurance.

Insurers have urged tougher action to curb the number of whiplash claims, which add an estimated £90 to every car insurance premium.

Banks have also complained that CMCs, which typically take a quarter of any PPI payout, have made their efforts to pay PPI compensation more complicated as cases brought by them often include large numbers of duplicate and bogus claims.

However, others have argued that CMCs have played an important role in alerting consumers to money which they otherwise would not have realised they were entitled to.

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Which? wants its proposed joint taskforce to scrutinise the activities of the personal injury and PPI industries and clamp down on any rule breakers by putting them out of business and imposing fines.

It said the taskforce, which would also include the Information Commissioner’s Office (ICO) and the Ministry of Justice, should also make recommendations for any new powers which are needed to cut nuisance calls and texts dead.

Richard Lloyd, Which? executive director, said: “Unwanted calls or texts are not just a nuisance, they can be intrusive and distressing.

“Many of us have been bombarded with spurious claims of PPI or injury compensation, and people are telling us they are totally fed up with this nuisance and want to see action.

“Our research once again shows that the behaviour of unscrupulous claims management companies must be tackled to stop those exploiting consumers who could claim compensation for free themselves.

“We want to see tougher regulation from the Government to clean up the CMC industry.”

From April, new rules will ban insurers from receiving payment for passing customer details to a CMC or a legal firm following a personal injury claim. But Which? said they will not cover non-injury claims such as car repairs.

Which? said people can avoid receiving nuisance calls and texts by never opting into third party marketing when taking out an insurance policy and registering with the Telephone Preference Service (TPS).

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They should not respond to spam texts, even to text “stop”, as this alerts the firm to the phone number being active and in use.

Consumers can also ask phone operators to block calls from international numbers as many cold calls come from abroad and they can also set up caller displays in order to screen calls, Which? said.

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