Scandal of the PPI claims firms

Are you owed thousands in mis-sold Payment Protection Insurance (PPI) payments by the banks?

Watch certain TV channels and this is a question you are likely to hear over and over again during the ad breaks.

Unfortunately however, the companies advertising that they can help you make a successful claim will generally want close to a third of the amount you are awarded in return.

And that means their fees often amount to thousands of pounds.

Here we explain why few PPI claims firms deserve their fees - and how you can make a claim and keep all the money you receive for yourself.

The booming PPI claims business

Over the last five or so years, millions of Britons have made PPI claims worth an estimated £17 billion.

However, much of that money has made its way into the pockets of PPI claims companies that promise to help people with their claims in return for a percentage - usually about 30% - of any payout.

PPI claims firms tout their business on a no-win, no-fee basis. But many of those who use them are disappointed by the service provided - and shocked by the amount they are expected to pay for it.

The Claims Guys

Here at AOL Money, we have received a number of complaints about a PPI claims company called The Claims Guys.

Alicia Quinn wrote to us after receiving a demand for £3,700 of the £10,000 or so PPI mis-selling compensation she was awarded earlier this year.

Quinn said: "I feel I was misled by the Claims Guys as they never once said that I could look into getting my money back by myself.

"The almost £3,700 they want now is way too much, especially as I've had to do a lot of the work."

However, The Claims Guys has refused to reduce the fee Quinn, who has now taken her complaint to the Financial Ombudsman Service, is being charged.

Compliance manager Diane Borthwick told me: "I am sorry that on this occasion I cannot agree to accept a reduced fee.

"It would be unfair to other customers to simply apply a reduction just because she has contacted you."

Huge fees for something you can do for free

The company has also refused to comment on many other complaints we have received from readers such as Claire Portch, who did not realise she would have to pay them a fee at all, and Marc Andrews, who received a demand for more than £5,000 in fees.

He said: "I signed an agreement almost two years ago with The Claims Guys, who told me that my case would be resolved in around six weeks and they would deal with everything on my behalf.

"Over the last two years I have filled out countless forms from Barclaycard and handled all the correspondence, but now I have received the settlement, again directly from Barclaycard, The Claims Guys are invoicing in excess of £5,000."

Rob Marsden, who was asked to pay £2,417 of a £6,713 payout, added: "I am angry because they literally did not do anything nor keep me up to date. I had to do everything myself so why should I pay them such a large chunk for little or no work."

How to make a PPI claim for free

The Claims Guys is just one of numerous companies offering PPI claim services, which are often also touted in unsolicited texts and calls.

But you do not need to use - and pay for - a PPI claims company to receive compensation for PPI mis-selling.

All you have to do is write to the lender or lenders you believe mis-sold you the cover, explaining why you have a legitimate claim.

To make it even easier, use the free PPI tool from consumer group Which?.

It helps you work out whether or not you are eligible for compensation, and generates a complaint letter based on your details. You reads more about how to reclaim PPI here.

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