FAQ: Payment Protection Insurance FAQ's
No Win No Fee On Payment Protection Insurance Claims Agencies
According to the Financial Ombudsman Service (FOS), as many as 285,000 new PPI claim cases are expected to be referred to them in 2012. This could make 2012 one of the most active years for PPI claims, with more and more people claiming compensation.
Of course, with any claim or act of this nature there will be things which customers are unsure of. For many people, the amount they are charged to make the claim is often one of their priorities and some may worry that they will face large bills regardless of whether their claims is settled in their favour.
For those who are concerned about this, one of the easiest solutions is to look for a claims management company which offers a “No Win, No Fee” policy*. With these, people face no charges if their claim is not upheld, meaning that they will not incur unnecessary charges.
There will only be a fee payable if the claim is cancelled at client’s request, after we have started your claim
This is seen as particularly important for those claiming for mis-sold PPI, with unfair charges being the root of the PPI problem.
A claim made on a no win, no fee basis will, however, mean that those who are successful are charged for the service – but this should be a fair amount.
After a successful claim, banks will reimburse individuals via compensation. Claims agencies deduct their fee as either a percentage of this figure or by a set amount (where their services may be charged at an hourly rate).
Whilst you are free to make a claim yourself, a small fee for the claims service is unlikely to have a huge impact on the claimant.
Therefore, individuals who feel they are entitled to claim may like to take the opportunity to obtain support and guidance in recouping their losses.
Claims companies have boasted numerous successes over recent years and more than £1billion has been paid out by lenders in the first ten months of 2011 alone.
In fact, the FOS already charges lenders for their services, having recently increased this as a way to penalise banks and companies who delay claim settlements. The current system sees claims referred to the FOS if a claim is rejected by the lender or if a decision is not made within a reasonable length of time.
The FOS has already charges banks and lenders a set fee for this but has recently decided to increase this by way of an additional £350 surcharge.
This will be applied, per case, for those lenders who have multiple claims or complaints being handled by the FOS. These charges will therefore not affect the claimant but will hopefully prompt lenders into reaching quicker decisions and thus lowering the charges.
The amount a claimant will pay if their claim is successful will depend on what company they use.
Typically, the fee is charged as a percentage of the claim but some firms may bill their charges through an hourly rate.
Of course, the decision to use a claims company is left entirely with the individual and claims can be handled independently should the customer have the time and inclination needed to deal with it themselves.
Average refund £3750 is the average amount of loan PPI compensation awarded (correct at 31st Dec 2012)