At a summit organised by consumer champions MoneySavingExpert.com and Which?, representatives from major banks, credit card providers and the Financial Ombudsman Service (FOS) agreed to work together to standardise complaints procedures and improve communication with customers.
Richard Lloyd, executive director of Which?, said that the summit was a "big step", but said that the participants would write to the Government to call for tougher regulation of CMCs.
"It is encouraging that action has been agreed to help people get back the £5 billion of mis-sold payment protection still available," he said. "We will continue to work with everyone present but the Government must also now up its game and speed up its plans to tighten up regulation of unscrupulous CMCs who are exploiting consumers who just want to claim back what is rightfully theirs."
PPI is intended to cover repayments due on loans for people who cannot afford their repayments because of an accident, sickness or death.
The FOS, which deals with individual consumer complaints about financial service providers, said earlier this year that it was anticipating a "record" number of cases involving mis-sold PPI over the next 12 months, after a failed court attempt by banks to challenge the Financial Services Authority's guidance on handling PPI complaints and providing redress.
Most people bringing PPI complaints via a CMC don’t realise they will be charged a fee (usually 25% of any compensation plus VAT) for something they could do themselves for free. In a recent survey of over 2,000 people by the two consumer bodies, a quarter of respondents did not know CMCs would charge for their services. Only 49% of respondents knew that using a CMC would be no more successful than bringing a claim on their own. Two thirds of the people surveyed had received phone calls from CMCs about PPI, while more than half had been sent text messages or letters.
"When the banks, consumer groups and Ombudsman all sit round the table and say 'something needs to be done' – you know there's a problem," said MoneySavingExpert.com's Martin Lewis. "Of the £5bn still to be paid out unless we act up to £1.5bn of it could go to claims companies."
"Sadly PPI has become a cash bonanza for unscrupulous claims companies, who through a series of lies and misdirection and persuading people they are the only option for getting their PPI money back. Even I've been texted to be told I'm owed £3,000 PPI – though I've never had the product."
However Natalie Ceeney, chief executive of the FOS, said that consumers would get "the same outcome, just as quickly" if they brought claims to their banks or credit card providers themselves. These consumers would also get to "keep all of their compensation", she added.
Which? and MoneySavingExpert.com said that they would provide insight to financial services providers which would enable them to make the new standardised complaints procedure clearer and simpler for consumers. Banks and credit card companies have also made a commitment to explain to their customers why CMCs are unnecessary.
Last month banks began writing to between four and 12 million customers who may have been mis-sold a PPI policy but are yet to make a claim for compensation. The letters are part of the 'root cause analysis' firms are currently undertaking to establish why there have been so many complaints about the policies. Taking action to ensure customers that have not complained are treated fairly is part of the process that firms authorised by the Financial Services Authority must carry out when they identify systemic problems in their sales processes.