Claims Direct, the U.K. company that handles accident victims compensation claims online, issued a new profit warning on March 28, estimating that it would have pretax losses of $28.65 million. The company is still suffering from bad publicity last fall, when a BBC program featured interviews with a number of people who had used its services, who claimed that their awards had been substantially reduced by its fees and charges. New cases promptly dropped from around 4,000 a month to 2,500. Since then Claims Direct has modified its fee structure, and undertook an advertising campaign to restore consumer confidence, but so far it’s had a negligible affect on new business. It also paid out $21.5 million to secure long term insurance coverage, and paid out more than $7.16 million to compensate its disgruntled customers. The company still hopes for profitability next year, and is currently in talks with the Association of British Insurers and the Law Society of England and Wales to reach an agreement on the recovery of legal costs.
Topics Claims
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