A Complete Guide to Claims Management Companies
If you think a company might owe you money — be it for a mis-sold financial product or compensation for an accident, injury or flight delay — you may be considering using a claims management company (CMC). Naturally, you want your claim taken care of as quickly as possible, and the right claims management company can be the answer to a stress and hassle-free claims experience.
But before you trust a claims management company with your claim, here’s everything you need to know about CMCs, from what they are, to how they work — and how you can choose the best company for you.
What Are Claims Management Companies?
Claims management companies act as the middleman between you and the company you want to claim against. They will handle every part of the claim on your behalf. They deal with the paperwork, the administrative details, they represent you throughout the claims process, and take care of the communication with the company you’re claiming against.
CMCs usually have experience handling a variety of different claim types. So whether you’re filing a complaint against mis-sold financial services such as mortgages or payday loans, or you’re making a personal injury claim, claims companies can help you file just about any claim, and win back the money you’re owed.
How Do Claims Management Companies Work?
Unfortunately, claims management companies don’t offer their services their free — their fees are usually a set percentage of any refunds you receive from your claim. Different claims companies will charge different fees, but the average fee charged by CMCs in the UK is just under 30%. For PPI claims, the regulations set out by the Financial Conduct Authority state claims companies shouldn’t charge more than 20% of your claim plus VAT. While the PPI deadline was the 29th August 2019, claims companies may be able to reclaim in certain circumstances.
Should You Use a Claims Management Company?
If you’re hoping to claim back money you think is owed to you, using a claims management company can be one of the best options. With experience and resources under their belt, claims companies may be more likely to succeed in winning compensation and achieving a rapid settlement.
Using a claims management company isn’t your only option — you could also take on the task yourself by contacting the financial services company you want to claim against, and potentially seeking help and advice from the Financial Ombudsmen Service (FOS). It’s completely free to file a claim yourself, even if you use the FOS. However, that’s not to say it’s the best way to go about handling a claim. Working with a claims company throughout the claims process can have a range of benefits.
The Benefits of Using a Claims Company
So using a claims management company isn’t a necessity, but it can be a good idea, especially if you haven’t filed any claims before or you’re not sure whether or not you have grounds to claim. But handing your case over to one of these companies will incur a fee. So do the benefits outweigh the cost? Here are some of the benefits of claims companies.
CMCs Can Offer Advice and Assistance
Claims management companies can help you figure out what you’re owed and whether your claim is likely to be successful. Because of the percentage fee CMCs charge, it’s in their best interest, as well as yours, to make sure you receive your compensation. So most claims companies will be willing to offer advice about your claim and help you start the claims process.
The FCA, the regulatory body for claims management companies, also requires CMCs to inform you not just about their services, but also any other official ways to claim, such as through the Financial Ombudsman Service. So as long as you find an authorised and regulated claims company, you can expect to receive expert advice before making your claim.
Claims Companies Have a Lot of Experience
Claims companies will have experience handling a variety of different claim types, and some companies may even specialise in dealing with claims like yours. With relevant experience, claims companies develop a list of useful contacts and the knowledge needed to offer you the best representation. They will also have success stories to share with you to demonstrate the potential of pursuing a claim.
Claims Companies Can Achieve Rapid Settlement
Being used to the claims management process, CMCs will know exactly how to file your claim. They won’t waste any time in organising the necessary paperwork and moving your complaint through the claims process. Many claims companies will use claims management software to automate much of the claims process, further speeding up the process.
Often, what holds up a settlement is incomplete paperwork, but claims companies will ensure all the required steps and forms are complete to achieve a rapid settlement. Using a CMC, you’re more likely to receive the money you’re owed without delay.
Claims Management Companies Can Save You Time and Stress
If you were to lodge a claim yourself, without using a CMC to guide you through the process, you would need to spend time researching how to make a claim. It can be difficult to know where to start, and the process can be time-consuming and stressful.
But working with a claims company means you’ll hand over responsibility to them — they’ll take care of everything for you. The company will ask you to fill in certain forms, but apart from that, your claims company will see your claim through to settlement. You won’t have to spend time figuring out the process, and filing a claim should be completely stress-free.
Most CMCs Will Offer a ‘No Win, No Fee’ Agreement
Unfortunately, not every claim will win compensation, and if your complaint isn’t successful, you may still owe your CMC a fee for handling your claim. However, some claims companies will offer “no win, no fee” agreements, meaning if your claim isn’t successful, you won’t have to pay any fees.
If you’re nervous about filing a claim, and the costs it may incur, no win no fee agreements can eliminate the risk of financial loss. Claims companies that offer these agreements make financial justice affordable for everyone, regardless of their financial situation.
How to Choose the Best Claims Management Company
If you want to make the most of the above benefits, and you decide to work with a claims management company, you must choose the best claims company to handle your complaint. Selecting a good CMC will improve your chances of winning compensation, and make the whole claims process fast and worry-free. Here are some tips to help you choose the best claims management company.
Check Claims Companies Are Regulated
Before working with a claims company, the first thing you should do is check they’re registered. In the UK, claims companies are legally required to be authorised by the FCA (the Financial Conduct Authority).
You can search the Financial Services Register to find out if a company is authorised. This will give you information about what type of business the company is and their registration status.
Checking that CMCs are regulated will help you avoid any scam companies, and give you peace of mind the company you choose has high standards. The FCA has strict rules in place for authorised claims companies to make sure customers are kept fully informed and protected from unreasonable fees and aggressive marketing.
Make Sure They Offer Clear Information about the Contract
Claims companies should be transparent about contract terms, conditions and the fee structure. Information should be easy to understand for customers with no financial background, and you should fully understand the fee structure before signing the contract.
If claims companies don’t offer this information or aren’t willing to explain their terms and conditions on request, it’s best to steer clear. The last thing you want is to blindly enter a contract.
Look for CMCs with No Win, No Fee Agreements
The most well-known claims companies will offer no win, no fee agreements, so your personal financial situation doesn’t have to prevent you from pursuing your money. Choosing a claims company that offers a no win, no fee agreement means you can benefit from representation, without the risk of financial strain.
These agreements also demonstrate the confidence of the company when it comes to winning a settlement — they often won’t take on a case unless they believe there’s a good chance of it being successful.
Do They Have Experience with Your Claim Type?
There are many different types of claims, including claims for personal injury, medical negligence, flight delays, as well as claims against financial misselling. When choosing a claims management company, make sure they have experience dealing with your type of claim. This will improve your chances of achieving a successful settlement — with the right expertise, claims companies are more likely to win compensation.
As a leading provider of claims management software, Logican has worked with a range of different claims management companies. To help you choose the best company to handle your claim, we’ve put together a list of the best claims companies to give you a head start on reclaiming your money.