Claims firms fail to win mortgage mis-selling compensation

Only one in ten mortgage mis-selling cases brought by claims management firms are upheld by the Financial Ombudsman Service (FOS).

The Daily Mail reports claims management firms are "duping" homeowners into paying typical upfront fees of around £500 in the mistaken belief there is a good chance of winning compensation.

It said cold-calling claims management companies are targeting homeowners sold self-cert mortgages, a mortgage they could not afford or those who have borrowed into retirement.

Claims management firms can charge fees of up to £500 for handling the case and take 25% of compensation won.

However, claimants who go directly to the FOS for free have just as much chance of having their case upheld, according to the report.