The City watchdog is spending millions on warning people that they have just two years (until 29 August 2019) to claim for compensation for being mis-sold useless payment protection insurance (PPI). But the Financial Conduct Authority’s deadline has led to all sorts of dodgy chancers hoping to make a quick buck at your expense.
If you haven’t got round to claiming for being mis-sold PPI, then you should. But ignore any texts, emails or letters you receive from people or companies which say they can help you with your claim. They will simply take a huge chunk – up to 40% – of your compensation. Do it yourself and you’ll save being ripped off again.
Reader KF of East Sussex fell for the patter of a company called Hampton Rae two years ago. It contacted him by phone to propose investigating and retrieving any PPI he may be due.
In fact, KF had already been through another firm which had helped him with a successful claim.
That didn’t stop the Hampton Rae salesperson. “We go back further in time and you may still be entitled to more PPI compensation,” they said.
KF was convinced: “They made a good case,” he tells Moneywise.
But then the problems began. The company asked for a £500 deposit and told KF that, “by law, it could not leave me in a worse financial state than when I began”.
He believed this, as did many others. In fact, the firm accumulated a sizeable sum from similar people that it contacted.
Did the firm ever do any work to earn its money? Erm. Very little.
“Over a long period, I contacted the firm for updates and I ended up doing a lot of its work,” says KF.
Eventually, after months of frustration with the firm, he decided it was time to get his money back.
“I asked for my deposit back, but, unsurprisingly, nothing happened,” he says. “I then asked for a letter of deadlock and, again, there was nothing. I spent literally hours on the phone with the firm and got nowhere.” (Before going to the Financial Ombudsman Service, you need a ‘letter of deadlock’ from the company with which you have a dispute, although if you’ve had no response to your complaint after eight weeks, you can take your case to the Financial Ombudsman without a ‘deadlock letter.)
That’s when KF turned to Moneywise. Our investigations reveal that KF is far from being the only victim. Online, many complain of their dealings with the company.
“I don’t think I’ll ever get my money back,” complains one person from Buckinghamshire. “They are just scammers,” he suggests.
“Once they’ve got your money, they just tell you a load of lies and empty promises,” reports another victim from Redcar, Yorkshire.
In fact, Hampton Rae is a trading name used by Swansea firm JAS Financial Advisory Services, which also traded as Litchfield Price and NLC Solutions.
The Claims Management Regulator published a damning report on the firm last year. It said JAS repeatedly took upfront fees, but failed to adequately progress claims.
With such dodgy business practices, it came as little surprise to learn that JAS went bust in 2016 and was wound up in February this year, leaving many people out of pocket.
Fight For Your Rights tracked down and talked to the liquidators of JAS, which pointed out that although the deadline for claiming as a creditor against the firm had passed, victims who used a credit card could claim a refund under section 75 of the Consumer Credit Act 1974. This legislation makes it clear that a credit card company is just as responsible as a retailer or trader for goods or services supplied.
We also talked to the Legal Ombudsman, which said it “played an important role in assisting over 500 consumers [victims of JAS], some of whom were able to claim a refund under section 75 of the Consumer Credit Act 1974”.
Luckily, our reader had paid by credit card and so was able reclaim his cash from his credit card company.
There are three important lessons for consumers here:
- First, pay by credit card for extra protection against being ripped off.
- Second, ignore cold-callers.
- And finally, research any companies online before handing over cash. Consumers are becoming quick to complain about poor service or dodgy firms on social media and that should be a big clue in helping you decide whether to do business with them.
OUTCOME: Reader refunded £500 via his credit card
Simon Read is a money writer and broadcaster. He was the last personal finance editor at The Independent and is an expert on BBC1’s Right On The Money.
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