In a recent survey by Which? endowment complaint companies are being accused of over charging customers and using misleading advertising.
Which? have said that many firms claim to offer a no win, no fee service, but 14 out of the 28 firms that responded to its survey charge an exit fee if the client pulls out. The highest cancellation charge is £587.50 from Endowment Claims, but the charge is not listed in the firms' online menu.
Some companies charge almost 30% of the compensation if the client is successful. Which? have also recommended that consumers should stay away from the 18 firms that refused to provide information for the survey.
The Department for Constitutional Affairs has recently set out an eight-week consultation over the regulations in the Compensation Bill, which is expected to receive royal assent in the next fortnight. Policing of claim companies should begin in October.
Our view
Do not be fooled. So called 'specialist' endowment complaint firms are in the business to make money, they are not there to put right any wrongs. If you have been genuinely mis-sold, which we suggest many people were not and did have the risks explained to them, as well as those that were, then you will receive compensation if you can prove it.
An endowment complaint handler will only be able to prove what you can prove, yet you will pay a fee in the form of a % of any compensation gained. Even the Financial Services Authority is going to regulate these firms, meaning all of a sudden you are seeing advertisements saying 'time is up' and claim before it is too late. This is because they would probably never be approved as a trustworthy financial services firm.
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