The Financial Services Compensation Scheme (FSCS) has paid out nearly £136 million in mis-sold PPI claims since 2008, with over £89 million going through claims management companies.
The number of consumers making claims for mis-sold PPI from failed firms has increased by 70% in 2012.
More than 19,000 people submitted claims in 2012, up from just over 11,000 in the previous year. Of these 2012 claims, 59% came from claims management companies (CMC), worth more than £29m of claims. CMCs typically take a cut of about 25% of the compensation so UK consumers handed over more than £7.4m (when they could have claimed from FSCS for free). However this is a fall compared to 2011, when 76% of claims were from CMCs and only 24% from individuals.
The average pay-out to those making their own claim in 2012 was almost £4,895, compared to £3,837 to those who used a CMC. With claims management companies taking an average of 25% of compensation, the average claimant pays almost £960 of their compensation. Since 2008, consumers have paid over £22m in compensation to claims management companies.
FSCS, which is free to consumers, has helped more than 4.5m people and paid out more than £26bn since 2001. Between 2008 and 2012, almost £136m of this total was for PPI claims.
Mark Neale, chief executive of FSCS, said: “Claims management companies take a sizeable chunk of any pay-out. Consumers who make a claim directly to FSCS keep every penny of their compensation. Some people may prefer to use a claims management company, but it is important that they understand the charges from the outset and are happy to pay them.
“Making a PPI claim to FSCS is free and simple. We have a dedicated customer services team to help guide claimants throughout the application process. Once it has been submitted, people will be contacted if FSCS needs any further information to process the claim.”
