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The claims gang

A clandestine investigation of claims managemrent companies has found that unfair contract terms, misleading advice and a lack of transparency are widespread.

Using such nefarious measures as unsolicited phone calls, the firms claim to help you make claims, saying that by using their services you stand a better chance of success. But if they do succeed then they stand to pocket 30 percent of the compensation, with some even charging up front.

Richard Lloyd. of Which?, said: 'Claims management companies must clean up their act. All too often, consumers are being misled about their chances of success and how much they'll have to pay - the last thing people need if they've already fallen victim to the PPI mis-selling scandal. We look forward to the Ministry of Justice taking swift enforcement action where appropriate, based on the findings of our investigation'

Martin Lewis, director of MoneySavingExpert.com website, added: 'Even if the claims handling companies all played it by the book, with mis-sold Payment Protection Insurance payouts of £3,000 to £5,000 now being commonplace, the price charged is far too high. Reclaiming is easy for many, just a case of making a call or writing a letter. Yet claims handlers often charge over 30 percent, which for many means losing over £1,000 of their payout and for most, it's just not worth using these firms.'

The results of the investigation have now been handed over to the Ministry of Justice. Let's wait and see what they have to say.

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