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‘Claims management companies are an absolute menace’

Building societies have hit out at claims management firms, calling them “a menace” and accusing them of submitting claims without their clients’ knowledge.

Speaking at the Building Societies Association annual conference in Birmingham last week, Principality Building Society chief executive and new BSA chairman Peter Griffiths said: “About 80 per cent of the claims coming in for PPI are from claims management companies. They are getting away with murder and it is a big concern for the sector. There are claims being submitted by them that their clients do not even know about.”

Leeds Building Society chairman Robin Smith said: “Claims management companies are an absolute menace.

“Their impact is an unpleasant addition to the cost of running a business and a wasteful diversion of management time.”

Coreco director Andrew Montlake says: “The problem is claims management firms whip people up into a frenzy regardless of what actually happened.

“I am sure there has been a lot of misselling going on but the way claims management firms approach the situation does not help.”

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Comments

There are 9 comments at the moment, we would love to hear your opinion too.

  1. Yes they are an absolute menace but if those who sold PPI in an improper manner had paid up straight away instead of stalling it with the FSA’s permission there would be nothing to complain about today, would there?

    I won’t be getting involved with PPI, I only work with IFAs who find their peers have done the dirty on someone.

  2. Lloyds TSB (Dunfermline) sold a client of mine PPI with a personal loan – he had already had 2 heart attacks and other pre-exisiting conditions – so the small print guaranteed no pay out.
    They added a few thousand onto his loan (premiums) + interest until I told him to go in and get it taken off.
    The bank did take it off and told him ‘it’s not out fault if your loan isn’t now covered’!

    Banks and building societies pile it high and sell it high to anyone tactics have come back to haunt them.
    Mind youm those customers who did make successful claims on PPI won’t be claiming…..

  3. @ Evan

    How can you go from applying to AIFA to stabbing your ex IFA colleagues in the back by launching your own Ambulance Chasing company.

    I quote from your website;

    A personal complaints handling service

    From a qualified former professional financial adviser
    No salesmen here.

    Are you eligible to make a claim?

    If you have taken advice from a bank, insurer or any other financial adviser with regards to how to invest your capital then that advisor is required to make sure that the advice you receive is suitable and specific to you and your needs. If it should ultimately transpire that the advice you have received was not entirely suitable or that information about your investment or savings plan was withheld or misrepresented then you will have grounds to make a complaint.

    It beggars belief but at least you have now shown your true colours.

    If youn are that anti IFA, why apply to AIFA in the first place?????

  4. I’m sure they are an absolute menace from Robin Amith’s point of view, but the banks and building societies are just trying to divert attention away from themselves over the PPI debacle. Yet again they’ve been caught cashing in on their customers unfairly, and as usual, they don’t like it. But don’t worry, Mr Smith, I’m sure Leeds will still pay you a nice bonus despite all this.

    PS did you know that claims management companies conduct business other than dealing with PPI mis-selling?

  5. A Nony Mouse, you are very brave behind your shield.

    Give me a call and I’ll tell you a story, it is about a widow with five children, an IFA robbed her of £300,000, another IFA asked me to help.

    The other story is about IFAs being unable to stick together.

    Then there is the story about me having some fun by applying for Chris Cummings’ job, not a cat in hell’s chance was there.

    Then there is the story of some IFAs stabbing me in the back. You might have been one of them.

    Go on, give me a call, I don’t bite, nor do I stab people in the back.

  6. @ A Nony Mouse | 13 May 2011 1:17 pm

    Just checked my database of IP addresses against the web stats.

    It is as I thought, you are your worst enemy, but I forgive you. Foot in mouth disease can be incurable in many cases.

  7. Undoubtedly there are many many instances of banks and, I guess, some building societies misselling PPI along with loans and mortgages.

    The point made at the the BSA conference reflects the fact that the honest institutions get caught up in the flurry of claims generated by claims management companies. Many of these claims come in standard letter format and accuse everything hoping that something will stick. There are also many instances of claims where the borrower has never even taken insurance in the first place!

    Unfortunately dealing with such claims delays redress for those with genuine greivances and creates monumental amounts of work which means greater admin costs that ultimately have to be passed on to the consumer.

    Perhaps there should be some consequence or cost for any claim that proves to be spurious?

  8. The worst aspect of claims management companies is that they tell consumers, or imply, that every endowment, every PPI, every contracted-out personal pension, every flexible whole of life plan was a mis-sale.

    It’s in their interest to do this and the fact that so many institutions find it cheaper to pay out rather than investigate only serves to spur them on.

    Incidentally, I have no doubt that Evan Owen will pursue his claims management venture in his usual ethical and effective manner.

  9. Sherwood Cape 27th May 2011 at 1:47 am

    Peter Griffiths has demonstrated that he is a muppet. Does anyone really take these greedy bankers seriously anymore? When are the authorities going to lock this guy up? His lot are nothing more that greedy, incompetent thieves, and yet this Griffiths guys has the cheek to say that claims maangement companies are a menace. The bankers are the menace – Wake up Peter Griffiths

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