Don't trust claims chasers!
PPI claims firms are pushing people into cancelling perfectly good life insurance policies, leaving consumers uninsured, warns one cover provider.
Hapless consumers are being confused by money-chasing payment protection insurance (PPI) claims management firms, which are cold calling people and advising them about claiming compensation for mis-sold cover.
According to protection specialist LifeSearch, these firms are calling consumers several times a day, regardless of whether or not the recipients actually have a PPI policy, leading to some people cancelling perfectly good life insurance policies.
PPI was supposed to cover loan, credit card or insurance repayments in case the policyholder was unable to pay, but was widely mis-sold. Banks and loan companies are now paying out billions in refunds to victims and claims management firms are keen to cash in.
Don't trust cold callers
"They are using cold calling techniques to try and get as much compensation as possible and that means confused consumers are accidentally cancelling good quality policies," warns Matt Morris, senior policy adviser at LifeSearch. "Be certain before you take any action based on the advice of a PPI claims call centre. They earn money when you engage their services to claim for compensation regardless of whether it's in your best interests."
LifeSearch recommends checking policies you have bought yourself to confirm you actually have PPI before making a move as the companies just randomly call anyone without bothering to check details.
Seek advice before acting
If you go ahead and cancel your cover and later realise it was a mistake, reinstating it could turn out to be costly as you'll have to reapply - and there's no guarantee that you’re still insurable or that you'll get the same premiums. Speak to an independent adviser if concerned.
LifeSearch's warning comes in the wake of news that the Ministry of Justice is investigating bad practice among the large numbers of claims management firms, which are mishandling people's claims, meaning victims are being stung twice.
Last week the MoJ warned "poor practice is rife" among these companies, which offer an unnecessary service. If you think you were mis-sold the cover, it is best to pursue the claim yourself as it will cost you nothing other than your time. You can do this by contacting the company that sold you the policy.