Claims management companies will have their fees capped at 30 per cent, under new City watchdog rules.
For years claims firms have charged hefty fees, with some taking nearly half of their customers’ payouts.
The charges are often for claims their clients could make themselves through services such as the Financial Ombudsman.
Crackdown: For years claims management companies have charged hefty fees, with some taking nearly half of their customers’ payouts
But from this month, charges for claims of £1,500 or less will be capped at 30 per cent or £420, whichever is smaller.
Firms will be banned from charging more than 15 per cent for payouts over £50,000.
Regulator the Financial Conduct Authority hopes the changes will save customers £9.6 million a year.
Sheldon Mills, executive director of consumers and competition at the watchdog, says: ‘Our rules protect consumers from losing a significant amount of their compensation in excessive fees, particularly when there are ways for them to make claims without incurring any fees.’
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