No need to pay for claims

Banks and consumer groups are highlighting the ease with which consumers can make claims without paying expensive claims management firms.

Using a claims management firm can be very damaging to your wealth.

These firms charge up to 30% of the compensation you receive, often in return for sending in a template letter that you can just as easily send yourself.

The process for PPI claims is very simple, with no need to resort to using a claims firm.

If you have been missold PPI, in the first instance you should write to your bank or the relevant adviser with your complaint. They will investigate your complaint and tell you their decision.

If you are unhappy with their decision, you can then refer your complaint to the Financial Ombudsman Service.

There is no cost associated with making a complaint and it is important to note that claims management firms offer no advantages over going direct to the firm with your claim.

Using a claims firm does not result in a higher level of compensation and does not result in a speedier process, despite what many claim in their marketing.

It is easy to understand why claims management firms would want to play a role in this process. With an average compensation payout of £3,000 for PPI sales, the estimated 800 claims management firms earn between £750 and £1,000 for each successful claim.

This explains why daytime television is flooded with their adverts and rarely a week goes by without another unsolicited text message sent to my mobile phone.

We hope that the campaign launched today by banks and consumer groups helps to highlight the importance of going direct to banks with any complaints, rather than wasting money on expensive claims management firms.