What are the New PPI Claims Company Regulations?
Regulations for PPI claims companies are coming into effect from 1st April 2018. Make sure you’re aware of the new regulations if you’re using the services of a claims management company.
The top-rated PPI claims companies are extremely busy at the moment, as they deal with a surge in claims due to the upcoming PPI deadline. The Financial Conduct Authority (FCA) announced the PPI deadline as 29th August 2019, with a £42 million advertising campaign for the PPI deadline fronted by Arnold Schwarzenegger. The aim of the campaign is to encourage people to make claims, rather than keep putting them off.
Data from the FCA shows an increase in payments to customers in the latter half of 2017, meaning the total amount repaid to customers for mis-sold PPI is soon to reach £30 billion.
With the deadline now set, PPI claims companies are aiming to process as many claims as possible before August 2019. Unfortunately, not all claims companies are honest with consumers. Many PPI claims companies have been fined for cold calls, whilst some encourage people to pay money upfront before the claim has been made.
In November 2017, the government agreed upon new regulations for claims management companies. The new regulations aim to provide customers with fairer rules when dealing with PPI claims companies.
Here, we’ve outlined what the regulations are so you know what to expect when dealing with a PPI claims company. If you know the new regulations, you will be able to find an honest and reputable PPI claims company to handle your claim.
New PPI Claims Companies Regulations
The following regulations will come into effect from 1st April 2018. All PPI claims companies must adhere to these rules.
- No upfront fees are to be paid by the customer before the outcome of a PPI claim.
- Customers must receive an itemised bill for all charges of work done on their behalf.
- The customer can cancel their contract at any time and charges must reflect what work has been undertaken so far. As per above, an itemised bill must be provided.
- No charges will be made when a client does not have a policy with a bank or lender. Many claims companies refer to this as a no win, no fee policy.
PPI Claims Companies Fee Cap
As well as the new regulations, a fee cap for claims companies is currently in the process of being passed by the government. The proposals outline that all claims companies should charge a maximum of 20% + VAT (24% total) for their services.
Many reputable PPI claims companies are already offering their services below this cost. For example, long-standing PPI claims company Canary Claims charges only 15% + VAT (18% total).
Once the regulation has passed, those PPI claims companies that are charging above this fee will legally have to lower their fees. This will impact many claims companies, some of whom charge above 30% + VAT (36% total) for their services. It is expected that the fee cap will be introduced within the next two of months.
For those people wishing to make PPI claims before the deadline, always seek out a company offering a no win, no fee policy and low fee. The best PPI claims companies are using claims management software from Logican. This allows them to manage claims efficiently and keep customers up to date with their claim.
Logican provides the best claims software for claims companies. They work with the best PPI claims companies so that you can earn back compensation from your bank or lender.