Many people in Britain who own a mobile phone would have been alerted about the PPI scandal through SMS if not anything else. Even if the news of the scandal was unfamiliar with some, the texts stating they were owed a sum of money would have raised alarms.
The Payment Protection Insurance was a financial product sold by banks and building societies alongside mortgages, loans, car insurance and many other types of finance. The aim of the insurance was to protect the borrower if they were unable to pay back the money back to the banks for reasons such as illness or loss of job. Many banks sold this to people who didn’t meet the criteria. As a result banks have now set aside £13bn so far in order to compensate the victims of the scandal.
Along with having to deal with a long procedure of getting the money bank, or hearing problems with the delay of payments from the banks, the general public also face another consequence of the banks actions.
Claims Management Companies (CMCs) contact people claiming that they are owed a sum of money according to their records. In fact they do not have any records. The people who send out these texts then refer the case to agencies and claim a slice of the money owed if the public reply to these texts.
Investigating one company, the Information Commissioner’s Office, found that the company were sending out 800,000 texts per day. “We are totally against these operations,” says Andy Wigmore, spokesman for the Claims Standards Council, a trade body for CMCs.
He mentioned that there were in some instances genuine companies contacting people. However with the rise in illegitimate researchers, it is not always possible to determine from the customers point of view, who is right and who is a fraud.
Dominic Pearce, Marketing Manager at Leading PPI Claims Management Company, MisSoldPPIClaimsCo.co.uk, is in agreement stating that “We do not agree with the practice of cold-calling or bombarding the public with SMS messages. All of our customers have contacted us through our various online and general marketing channels”
The majority of people who claimed for redress have been successful. PPI claims can be made without the help of any companies. Individuals can apply themselves. However with the ever increasing advertisements stating “no win no fee” ever since the High Court ruling was delivered, some fall into a trap which they necessarily did not need to, leading to the companies taking out a slice of what is rightfully theirs.