U.K. on-line personal injury service provider Claims Direct announced that it is setting aside £5 million ($7 million) to settle complaints from customers that they were shortchanged on settlements negotiated with insurance companies using its service.
The controversy was highlighted on a recent T.V. consumer affairs program, which investigated complaints that Claims Direct’s charge of £1395 ($1950) for pursuing a case wasn’t included as part of any recovery, and increased the 30 percent Claims Direct receives as part of any settlement or court judgment, leaving them to seek an additional recovery from the insurer.
The practice ended in April, but there are still an estimated 10,000 former Claims Direct customers who are seeking to recover the additional cost. A company spokesman said the amount set aside was sufficient to cover all claims, and that Claims Direct continued to do very well for its clients, and expected to reach its profit targets for the year.
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