31st May 2012
A claims management company is using the initials of the Financial Services Compensation Scheme (FSCS) in its online advertising. This may mislead consumers.
FSCS is not connected to the company, which charges for its services. FSCS is free to consumers. It was set up by government, is independent and funded by the financial services industry.
The company uses the acronym, fscs, in online search advertising promoting its services. It’s a claims management company that is seeking payment protection insurance claims (PPI) from consumers.
These companies take up to 25% of the compensation FSCS pays for PPI claims. Yet consumers still have to provide the same information to the scheme. Applying for compensation from FSCS is a simple process that does not require any special skills.
With the average pay-out to those going via a claims management company being £4,534, a quarter of this is more than £1,133. In the case of the company concerned, the fee is 20%. That means people will lose about £906 on an average claim. And FSCS estimates that, in total, consumers could pay as much as £12m in fees to claims management companies this year.
Paying a third party to submit a claim does not significantly increase the chances of receiving compensation either. The number of successful claims made by individuals is almost the same as for those made by third parties.