Claims management companies are increasingly advertising to social housing tenants for claims. But some firms don’t make it clear they’ll charge a fee.
Claims management companies (CMCs) handle a wide range of claims for people who think they’re owed compensation or redress. But CMCs charge a fee for this and we’ve found some firms don’t make this clear. As a result, consumers can be left with a lot less of their compensation than they were banking on.
This year, we've seen an increase in CMCs advertising to social housing tenants for claims including repair delays and vermin infestations.
One tenant, Krishan, wanted to make a claim against his provider for the mould in his flat caused by ongoing repair delays. When his newsfeed showed an ad for a 'housing helpline' offering to get him compensation, he went to the site but it raised some red flags.
He gave us a call and some things immediately caused us concern:
- The site clearly wasn’t providing a helpline. It provided a 'quick, easy online checker' for claiming but, whatever answer they gave, people were automatically told they were eligible to claim.
- The site didn’t mention that a percentage of any compensation would be paid to a CMC – this could mislead consumers into thinking this was a free service.
- 'Up to 100,000 customers could get compensation' – this was misleading, as the firm couldn’t possibly know how many people were eligible.
- 'Average claim value we've won for customers is £2,000' – this was presented with no evidence and looked like a figure plucked from the air.
- It was also unclear if the firm would help him to progress his claim, or just pass him to another organisation for this for a fee.
- The site didn’t say if the firm was regulated – usually either by the FCA or by the Solicitors Regulation Authority – which CMCs need to be.
If you think you've been targeted by a scam or an unauthorised company, you can report it to us[1].
Making a claim yourself
Image of a man working on his laptop
We discussed these issues with Krishan and also told him he should make a complaint to his landlord first. Krishan said he had made a complaint and had been ignored.
We told him he could then make a claim for free via the Housing Ombudsman Service[2]. Krishan hadn’t known about this option and decided to fill in their online form first.
We've written to the firm to tell them its ad and website are misleading and it must change them to comply with the rules.
You don’t need to use a CMC to make a claim, it’s free and simple to do it yourself. A CMC can make a complaint for you, but you’ll have to pay a fee. If you're thinking about using a CMC, or another type of claims management service, find out what to expect[3].