Are Claims Management Companies Worth It

Most professions including legal services, accountancy services and financial services have full complaint handling procedures as set down by their regulators or professional bodies.

Financial services is no different where the Financial Conduct Authority has broadly set out complaint handling rules as follows:

Making a complaint is free, there is no charge to the consumer.

1. Make a complaint in writing to your financial firm.
2. The company has 1 week to confirm receipt of your complaint.
3. 4 weeks – the company must give you an update on the progress of investigating your complaint
4. 8 weeks – a full written response to your complaint is required, whether that is turning down your complaint, accepting your complaint and apologising and in terms of financial detriment, calculating compensation in accordance with guidelines.
5. If you are not happy with the response, you are able at no charge, to refer your complaint to the Financial Ombudsman Service.  They are independent arbitrators, who will ask both you and the company for the facts, records etc and make a judgement.  This may be rules in your favour of the company’s favour.  The Ombudsman will also decide upon what compensation level, if any, should be paid.
6. The company must comply with the ombudsman’s ruling, you do not have to comply and can take the matter to court if you choose. 
7. Going to court is not free.

In short, you can make complaints without cost and no need for a claims management firm.

Claims management firms often advertise their service is free or introducers/lead generation firms for complaints claim is a free service.  It is not free.

Any client introduced to the claims management company will be paid an introducers fee or commission.

Your claims management firm may offer “No Win, No Fee” terms – but they will usually only take you on if they believe they can win a case for you (they are NOT charities, they are businesses)

Claims management firms usually charge between 25% to 35% + VAT on the amount they will in compensation.

So you are paying them and losing some of your compensation when in fact you could be making a complaint for free.  Granted, some people may need expertise with their claim although many so called ‘claims management experts’ may actually be failed financial services workers.