Watch out for the PPI scam

Johanna Gornitzki's picture

If you’ve found yourself watching daytime television recently, the chances are you’ve seen an advert for how you can claim compensation for mis-sold payment protection insurance (alongside Stannah stair lifts and funeral plans).

And yes, if you’ve got a PPI policy you could well be eligible for compensation. In fact, millions of people have been mis-sold the product (designed to cover your earnings should you fall ill, have an accident or lose your job), as it was pushed by unqualified ‘bank advisers’ to many customers who would never have qualified to make a claim. These included retired and unemployed people who had no job to lose, the self-employed, and people with pre-existing illnesses.


Banks made billions in profits from these policies, with high commission charges alongside low claims rates (roughly just 20% ever paid out).

So it’s only fair that banks finally have to cough up for their greediness. But before you go ahead and make a claim, watch out for the vultures that are currently enjoying the compensation feast; the claims management companies.

Often referred to as ambulance chasers, these are the ones that are running all the ads on TV, sending you texts or calling you about your possible PPI compensation claim. And are they doing it out of love for you, the customer? 


These firms are making a tidy profit. One called me recently about my potential PPI claim (I haven’t got a policy at all but apparently a lot of bogus PPI claims are being made – and mostly by claims management firms). I asked the sales rep on the phone just how much commission the company would take if my claim was successful. He reluctantly revealed that it was in fact, wait for it, 30%!

Seeing that the average payout for PPI complaints is around £2,750 (according to the Financial Ombudsman Service) that means these firms would make £825 on each successful claim – not bad.


But do they have to put a lot of effort in? Not by the sounds of it. I had a meeting with the Financial Services Compensation Scheme (that deals with any PPI claims from insolvent firms) the other day, and it told me that any PPI claims made to it by claims management companies often lacked even the basic details, so it would have to chase the customer instead. 

So, a big chunk of commission for hardly any work. Not surprising then that around FOUR IN FIVE of all PPI complaints the FOS and the FSCS receive are made by claims management companies, and not individual customers. 

But the thing is that there is no need for a consumer to use a third party to make a complaint – each case will follow the same process, regardless of who is bringing the complaint. Additionally, the Ombudsman service is free, and so is the FSCS. 

It’s also fairly straightforward to claim compensation for PPI. If you think you have a valid claim, simply contact your lender and ask for a review. Banks have 21 days to appeal the decision. If they do not appeal – or if that appeal is unsuccessful – you can submit your complaint. If that doesn’t work, speak to the Ombudsman that will fight the case on your behalf.

In the words of the Ombudsman: "Why pay someone else to do it for you – when you're just as likely to win by doing it yourself for free?"

Your Comments

I recently Signed up with one of these PPI  recovery Companies .
Family Money Savers Charge 39.99% plus a completion charge of £ 37.50
out of a claim Awarded of £2680.72  £239.83 tax deducted £2440.89 there service charge was £1109.52 .
Whilst they acted profesional I must  agree that unfailr levies for this are charged .
If you think of reasons why PPI has been recovered in the first instance because it was implemented incorrectly in the first instance.
One wonders how much longer will we have to wait before the goverment adminIsters his levy on how much these compainies can charge.
To add further injustice because I disputed there charge and levy this has increased further with extra charges that now brings this upto £1211.12 .for late payment .
Come on Chancellor this cant be write its time to rain these companies in .

I am extremely unhappy with my efforts to claim ppi. I have gone from a broke situation as a person with a little hope of claiming some ppi back to a worse off situation where I now owe the PPi recovery company. I shall not name them yet but I need to have advice on what my next step should be. I'm going to see the citizens advice soon. Firstly I didn't want to go ahead with a PPI claim as when I received a call one day from a company I informed them that I would be a hopeless case as I had tried once before but nothing much happened and I didn't believe thay would be able to help me. Then I got the whole endless speech about how they were different and could get me my money. I felt so pressurised but they kept igniting a flame of interest in me. I did leave it at that point with the gentleman saying that I didn't think I wanted to go down that route and would try myself if I wanted to. Then I got a call  later from the same guy with the same force and the same pitch. This time his persistence paid off as I had thought about it and said ok go ahead. He then sent me paperwork for me to fill out, return, adding my companies and ref numbers if possible. We didn't talk about the charge they would take from me if I win. I believe it's 39% I found out since. Neither did we talk about any fees they would give me at anytime. I felt confident in them to help me. I'm claiming JSA so it would help me alot. I felt the case dragged on and I kept receiving no end of textes asking for details of each claim which I had about 5 plus ongoing but I had already supplied that information. Despite this the textes continued and the letters kept arriving asking me to fill out the same forms with the same information that I had already supplied. Then it all hit the fan!! I had written to them asking what would be the procedure to withdraw from their service along with other information in the letter but they did not respond to that. Infact I received a very hostile telephone call from a very irate and upsetting man which I believed to be the man I had originally spoke to telling me that I must pay their invoice they had now sent to me for their cancellation fee as they had cancelled one of my claims due to me ticking a box on the form saying no to having it previously investigated. I explained that I had previously had a conversation with the same man and told him that i had told him I had looked into ppi claims with another company before and he had reassured me that he could help. He denied that out right and ranted and raved calling me a liar! A fraudster! He said I was a con artist. He kept talking over me saying..Are you or are you not a liar Miss ...........? I felt  so confused and intimated and I tried to argue back but he was aggressive and unrelenting. In the end he shouted me down into feeling like I had to pay it. I told him, I must be the first person in the history of ppi claims to owe money when i HAVEN'T EVEN RECEIVED MONEY BACK. He was charging me £180 and wanting it all upfront even though I told him that I am on benefits and not able to find that and that I was with cscs who are now Step change on a repayment plan for my other creditors and I pay them £1 a month back each. He would not listen. He was shouting and telling me that I had cost him money as it was his company, which was funny as he had previously said he was working there and he consulted with his bosses. The story changed. There was an occasion too when I spoke with one of the female workers there. I think she rang me and I was saying that I could not pay. At one point as I was disagreeing with her over the reason for the charge I told her that I had previously spoke to someone there and she was saying that I had never spoke to anyone there and trying to convince me that I had spoke to a different company. She claimed that I must be confused and had previously been talking to another company altogether. We were both expressive but never at any point was I hostile, I was just angered by the situation not the operator. I could tell that I had been switched to loud speaker which is very unprofessional I felt. Then the same man i HAD SPOKE TO PREVIOUSLY GOT ON THE PHONE AND TOLD ME THAT i HAD BEEN ON LOUD SPEAKER WITH THEM LISTENING AND i WAS AGGRESSIVE TO THE LADY. I tried to plead my case that I wasn't at any point and I was saying that she was telling me that I had not spoke to a man previously and I told him I know it's you because I recognise your voice. He kept talking over me. In the previous call he had been unprofessional and put the phone down on me and in this one he was threatening it too again. So the lady had told me that I didn't have a conversation before with a man but now he was admitting that he had spoke to me. Again this time he claimed he owned the company but previously he said he was an employee.  At this point I decided to stand my ground and not be forced down. I did not feel I should pay the invoice and I did not like his tone and aggression. He lacked the skills to speak to a woman properly let alone a customer. I felt bullied by him and told him that. He kept saying things like .".as I haved said for the umpth time previously but you dont listen"....and " you are a deceiver and a liar". He said he had listened back to the call previously as it's recorded after I had written my letter of complaint stating that I felt under pressure to join their company and said that I had mentioned I had previously treid to claim ppi elsewhere, but he was shouting and saying the recording had not showed me saying this and he would not accept that I was under pressure to take their services up. I do not know what happened to that. He accused me of shouting at the girl talking to me and I told him no way did I feel I had I was trying to express my point. He was doing to me everything he was accusing me of doing. I really did not want to deal with this company anymore and I knew they had my other claims so I felt trapped. I have since looked on their website and it says that a cancellation fee will be put in place if I cancel their services not if they cancel it. As for ticking the wrong box I tried to explain that I was filling out alot of forms and I did not intentionally tick it and I thought it was ok as I had said before another company had looked at it. He wouldn't have it. He kept threatening to put the phone down and not deal with me. On their site too, it claims that they are a company who understand human  error. What is this if it is not a human error?? Eventually after being totally intimidated and feeling hopelessly afraid I listened to him telling me that he would be doing me a favour at a loss and how he had yet again done me a favour with his company suffering because he was noe going to reduce the price to £100 not £180. He then passed me back to the female operator and we spoke well . I apologised to her if she felt I was having a go though I did not feel I had abused her and felt I had been abuse by Mr. P?? I felted backed into a corner and she said she would talk with him and see if he would agree

to me paying monthly because I now had another debt and was worse off and with no wage. I said I could pay £10 a month and she went to talk to him saying she didn't know that he would take installments. I felt they were doing the good cop bad cop routine on me and I felt fooled. She said he said £30 a month start now for 4 months. I couldn't believe it I was so finacially worse off trying to gain some pay back for money robbed from me and I got robbed again!!! HOw is this right?? I paid £30 at the bank innto what looks like a private account as the details don't have the company name on it. Since then i SPOKE WITH A FRIEND AND LEGAL ADVISOR he was furious and said do not pay anymore as it's a con. He said I can not be penalised for incorrectly ticking a box. He rang Mr. P and asked him to explain himself and Mr. P infact denied knowing me and denied saying I had been charged £180. My advisor persisted and put him in the same position he put me. Backed in a corner and hurled with facts. he didn't like it and my advisor told him.."Do you like the way I am speaking to you, because that's the way you spoke to Miss......... Mr. P was more concerned to know who he was so he told him but Mr. P did not like being questioned by my friend. Immediately after the call adfter Mr. P saying he didn't know me he rang me and said he had just heard from my friend and starteed to say let me tell you this.. I told him I wouldn't talk to him anymore so deal with my legal advisor. Since I received a long text saying following the phone calls to me and my friend my claims are cancelled and my payment plan as the result of threatening  behaviour. Cancellation invoices shall be issued for all work undertaken and also said that my invoice was over due. I feel Mr. P feels it's ok for him to act with threatening behaviour especially to a 50 year old woman. i was wondering how many other older and more vunerable people has he bullied and shouted down and then billed them. The latest is that I received a letter cancelling all my claims and including the invoice I owe them £340. £80 being in late fee reminders so I guess they keep adding £20 everytime they keep writing to me.  Again let me remind you...they take into account 'Human error' and 'it I cancel, there's a fee to pay. I did not cancel these cases. ' I believe I also have a letter that states that I had cancelled . Their invoices claim that I cancelled them following our conversation

Hi there, I have had the same proble, I know exactly which company your talking about,mimreceived one PPI back and paid there fee, the others they couldn't find, so I thought that would be it, but no, texts keep,coming saying they will send a questionaire to complete, but when I originally got the call they went through sounded like a list of companies saying they will tick them anyway I case there was a PPI and that it was no win, no fee so what did I have to lose! 
Now they are asking for a fee for each one they didn't find, scam scam scam, I have emailed them but no reply, tried to ring but just get their irritating voiceover man saying we are closed, so how do you stop all this, I'm not paying anything for PPI claims that were unseccessful 
any Suggestions?

Hello, I am having the exact same problem, I don't know how to go about it either, I'm really worried, when they say no win no fee, it should mean just that, but they are now asking for further information when initially said it didn't matter as they would be able to find the information, but as they haven't located the claim they now charging ME £200 per claim they haven't got , so wrong, what a scam, so if you or I find out anything post it on here , I have emailed them and now waiting for Monday to ring them, but all I get is that stupid voiceover man who says ring back when we open, I am !! Answer the phone!!! 
So so I sympathise with you as this is totally worrying 

It would be really helpful if the name of the companies who are scamming were mentioned, this would help people to be aware.