Who Regulates PPI Claims Companies?
If you are looking to hire a PPI claims company, you will no doubt want to find one that is reputable and trustworthy. Who regulates these companies and how can you check the authority of a claims company?
PPI claims companies are extremely busy at the moment, due to the upcoming PPI deadline.
The best PPI claims companies are working hard on behalf of clients to contact the banks and lenders before 29th August 2019 — the imposed deadline for all PPI claims.
To date, the banks have paid over £32 billion to consumers for the mis-sold insurance. However, it is likely that billions more could be paid out before the deadline. With just 11 months until the cut-off date, consumers need to act soon if they want to receive a refund.
All claims companies handling PPI are regulated. The regulations ensure that customers are treated fairly and that there is a standard set across all companies. These companies are currently regulated and authorised by the Claims Management Regulator (CMR).
What Is the Claims Management Regulator?
All claims companies have to register with the CMR. The Claims Management Regulator has an up-to-date list of all authorised claims companies on its website. Consumers can search this list to find a company and check its status. Most PPI claims companies will list its registration number on its website for an easy referral. If a consumer wants to make a complaint about a claims company, they can contact the CMR.
However, after April 2019, claims companies will be regulated by the Financial Conduct Authority (FCA). This means that companies will have to reapply for authorisation to be added to the new list of registered claims companies. The FCA has strong links with PPI claims companies as the organisation that imposed the PPI deadline. It is currently working to promote the deadline to all consumers.
How Will the Financial Conduct Authority Regulate PPI Claims Companies?
The FCA has outlined its intentions for when it takes over the regulation of claims companies in April 2019. The new regulations mean that companies will have to do the following:
- Provide documentation with an outline of all the involved fees — This must be sent to consumers before any contract is signed.
- Inform of free alternatives — Companies should highlight to customers any free alternatives to using a claims company, such as making a PPI claim independently. This rule is already in place for debt firms.
- Keep and record all calls with customers — Calls from the past 12 months should be kept.
- Ensure accuracy of lead lists — “Lead lists” are sometimes used by claims companies to call potential customers. Companies must take care to ensure these lists are accurate and sourced legally.
It will also review the fees charged by claims companies. Earlier this year, the government passed an interim fee cap, which meant all claims companies were forced to cap their fees at 20% + VAT. Some claim companies, such as Canary Claims, charge well below this imposed fee.
Before any PPI claims company can continue trading, it must apply for authorisation from the FCA. Many companies are currently in the process of doing this.
With the newly imposed fee cap and changes to regulation, many PPI claims companies might find themselves struggling in the competitive market. Only claims companies offering a low fee and exceptional service will continue to thrive and help consumers before the 2019 deadline.
What are the best regulated PPI claims companies? Read Logican’s comprehensive guide to find out. Logican provides claims software to a variety of claims companies. To find out more about our claims software, contact us today on 0800 084 272