Insurance refund firms charging up to €500 for a claim
CONSUMERS who fear that they have been mis-sold payment-protection insurance have been advised to make their own claim for a refund.
That is because using one of the claims-management firms that have begun to spring up could mean losing up to €500 of any payout in costs.
The fees can gobble up as much as a quarter of any refund. This means that someone who gets compensation of €2,000 will end up shelling out €500 in charges.
The National Consumer Agency said there was no need to engage a solicitor or a claims agency.
Payment-protection insurance is a type of insurance that repays your loan, mortgage or credit card in the event that you lose your job, have an accident or die. It is separate to mortgage-protection insurance, which lenders insist homeowners take out.
In the summer, the Central Bank ordered seven firms to trawl through payment-protection policies they had sold since August 2007 to see which, if any, had been mis-sold.
Protection insurance was often sold to people who would never have been able to make a successful claim. These include the self-employed, homemakers and part-time workers who are barred under the insurance contracts from making a claim.
The total compensation bill for payment protection mis-selling could reach €600m.
Anyone who thinks they that were mis-sold this type of insurance should contact the firm that sold it and ask for the policy details, including the terms and conditions.
People who feel they have a case should ask for a refund. If they are not happy with the response, they can then take a case to the Financial Services Ombudsman, the National Consumer Agency (NCA) said.
A spokesman for the NCA said: "Beware of claims companies who say they will get your money back.
"These companies will charge you a fee, which can often be a large proportion of what you are refunded, sometimes 25pc."