Since August 2017, the Financial Conduct Authority (FCA) has been promoting the upcoming PPI deadline. 29th August 2019 is the cut-off date for making PPI claims. The aim of the deadline is to encourage people to make a PPI claim if they’ve been putting it off. Despite thousands of UK consumers already making claims and nearly £30 billion paid back to customers, there is still a huge amount of money to be claimed by consumers and paid back by the banks.
Consumers need to act now to find the best PPI company, or contact their lender as soon as possible, before it’s too late.
The PPI deadline is being heavily promoted by the FCA, Martin Lewis from Money Saving Expert and claims management companies (CMCs). On top of that, the Plevin ruling means that even more people are able to reclaim money within the next 18 months, even if a previous claim has been unsuccessful.
With such high volumes of claims to be made, CMCs are expecting to be busy until August 2019. Being able to manage high volumes of claims at this time is crucial for their success. But, the upcoming PPI claims company fee cap will have a dramatic effect on CMCs.
How will the claims companies manage large volumes of claims? What effect will the fee cap have on CMCs? We discuss these issues and look at the future of CMCs once the new regulations come into force.
How do PPI Claims Companies Manage High Volumes of Claims?
The best PPI claims companies have one thing in common: They all use the best software, which streamlines their claims and allows the business to run efficiently on a daily basis.
Some PPI claims companies are dealing with over 100 new claims per day. This means communicating with clients, lenders and credit check companies to gather all the relevant information.
With the ability to automate correspondence and repetitive tasks, having the best software is what makes a PPI claims company stand out from the rest. It enables the best customer service, efficiency of claims and ultimately, profitability.
Without the most efficient software, any claims company is lagging behind the competition. The best PPI claims company has the best software.
What is the PPI Claims Companies Fee Cap?
CMCs charge variable amounts for their services. However, regulations are coming into place which will regulate the amount that these companies can charge. The proposal is for CMCs to charge no more than 20% + VAT for their services.
Other regulations include:
- No charges for clients who have an unsuccessful PPI claim with the lender
- No fees to be paid until after the conclusion of the PPI claim
- All cancellation charges are clear and provide customers with an itemised bill for any charges
Many reputable PPI claims companies already adhere to these regulations. But, for those that don’t, this will have a dramatic effect on their business. The regulations will come into force from 1st April 2018 and the fee cap will be introduced two months after the bill receives Royal Assent, which is expected in March 2018.
The effect of the fee cap on CMCs means that many will have to significantly drop their service fees, as some charge in excess of 30% on successful claims. Companies which charge upfront fees will also have to cut these charges. For many claims companies, the result will be a significant loss of profits.
Only the best PPI claim companies will be able to survive after the regulations, meaning their customer service and software need to be seamless.