Discussion about the looming PPI deadline remains a top priority for the Financial Conduct Authority (FCA). With August 29th 2019 being the cut-off date for making PPI claims, many people are hastily trying to find the best PPI company to work with.
But, while claims management companies are busy dealing with claims, a regulation is coming into force which will change the landscape of PPI claims. As of April 2018, all claims management companies must cap their service fees. With some companies charging up to 40% for their service, this will have a huge knock-on effect on their profits.
What is the Claim Companies Fee Cap?
All claims management companies are regulated by the Claims Management Regulator (CMR), part of the Ministry of Justice (MoJ). Its role is to regulate the cases brought forward by different claims companies, such as mis-sold products and personal injury.
In 2015, George Osborne announced that discussions would take place to regulate the amount claims companies could charge for their services. Since then, discussions and decisions have been made regarding the fate of claims management companies and their fees.
Last year, the CMR confirmed regulations which will come into effect from 1st April 2018. This includes claims management companies capping their fees to 20% + VAT and no fees must be charged prior to the conclusion of a PPI claim.
There has been little promotion of the new regulations. But, it’s crucial that consumers are aware of the new rules so that they can work with a reputable and legally-abiding PPI claims company.
What Does the Fee Cap Mean for Companies and Consumers?
While the best PPI claims companies offer less than 20% (including VAT) and no upfront fees, for many other companies, this will be a huge blow to their profits. The competition will be higher amongst PPI claims companies, as for some, their fees will drop by nearly 50%.
However, for the consumer, having this maximum charge price will be very beneficial. The fee cap means that consumers cannot legally be charged more than 20% + VAT for using a claims company. If any company does so, it can be reported to the CMR.
Which is the Best PPI Company to Use?
It’s possible to contact the bank yourself to make a PPI claim. However, many PPI claims companies can make a claim on your behalf, so you don’t have to deal with correspondence from the bank or chase claims.
If you decide to use a company to make a claim on your behalf, you want to find the best PPI claims company. There is a lot of choice out there, so spend a little bit of time checking over each company, bearing in mind the following three steps:
- Check if the company is managed by the CMR. There should be a reference on the website if they are, which can be double checked on the Claims Management Regulator website.
- Make sure it has a no win, no fee policy. You should not be paying any money upfront to the company.
- Finally, check the fees the company charges. Even when the fee cap comes in, some PPI claims companies will be offering a fee which is lower than the rest. Find a company which offers low fees so that you will receive as much of your money as possible. Always check the terms and conditions and read the testimonials to check customer satisfaction.
For those wishing to make a PPI claim before the upcoming deadline, the most important aspect of all of this is to act now. August 2019 may seem like a long way away, but with more people making claims, your claim may take much longer to process. So, start soon, find the best PPI company to use, and do not miss out on this final opportunity to receive the money you are owed.