Research carried out by the Financial Services Consumer Panel indicates that consumers are using mortgage endowment claims companies to save time, and help them through what they see as a complex process.
The research also claims that around 66% of successful claimants believe that they have received value for money from mortgage endowment claims firms. Given that the claim firms usually charge between 20%-30% of the compensation recovered, for work that the claimant usually do himself, this "value for money" seems to be a somewhat misguided belief.
Even more bizarrely, 25% of those who were unsuccessful said that they would definitely recommend the services of a mortgage endowment claims firm.
Given the alarmingly naivety of the respondents, it is hardly surprising that the financial services industry make such "hansom" profits out of the British public year in year out.
John Howard, chairman of the Financial Services Consumer Panel said:
"Some consumers seem quite prepared to pay part of their compensation to a claims firm, especially when the alternative is to receive no compensation at all, because they do not have the time or the confidence to pursue a claim themselves.
It is not clear the claim firms save consumers that much time and there was dissatisfaction with some aspects of the service provided by some firms; not giving details about the fees up front, and poor service in telling clients when the claim was not successful. This needs to be considered as the government starts to regulate this arena through the Department of Constitutional Affairs."
Quite why this is a DCA matter is beyond me, as it clearly comes under the FSA's and Treasury's remit.