The insurance industry is showing a greater willingness to challenge increasing credit repair rates as it looks to cut some of an estimated £450 million that they add to its claims bills.
TCF, the fraud management company, has said that it has seen a 300% increase in referrals from insurers to its credit repair rate validation service in what is only the second quarter of the service's existence.
Launched in April of this year, the service gives insurers the ability to screen and validate or challenge credit repair charges, with the aid of a current database of labour rates and case specific evidence.
Insurers and law firms acting on their behalf can instruct TCF to screen all their credit repair cases free of charge. Where a rate appears inflated, TCF obtains rates from three repairers local to the claimant’s address and if possible a ‘man on the street’ rate from the repairer in question.
If the result is a saving of less than TCF’s £85 fee, the information is free of charge. Where the results show savings of over that amount, TCF provides a rates report to enable negotiations to commence. If necessary, TCF can be instructed further to provide court ready evidence, including recordings of the mystery shopper calls made to secure the comparison rates.
Users also benefit from free membership of the TCF user community which runs networking and educational events and has an interactive, closed electronic forum with opportunities to access exclusive content and debates.
Inflated labour rates have been identified on 62% of credit repair cases referred to TCF in the last six months with an average saving of £400 made on challenging an inflated invoice.
The company says that challenging just 100 inflated invoices per month could save an insurer over £480,000 a year in credit repair charges.
“Never before have insurers had the ability to screen and validate or challenge credit repair charges, utilising a robust, current database of labour rates and case specific evidence where necessary," said Stuart Dennis, CEO of TCF.
"And, never before have insurers’ credit repair teams had a forum to network, share knowledge and best practice; unlike their CHO counter parts. We recognised the need and responded. Overwhelming demand for the service and to attend our user community events, demonstrates the industry has a voracious appetite to act and collaborate, to control this area of increasing claims costs.”