By Louise Greenwood
BBC Radio 4's Money Box
There is concern people may not know they can claim direct for free
Endowment complaint handlers have been defending themselves after the insurance industry's trade body advised members to pay compensation direct to consumers.
Dozens of professional complaint handling firms have sprung up in the wake of endowment mis-selling.
Most claim to secure larger compensation payouts for people who think they were mis-sold a policy, but they charge on average a quarter of the payout as their fee.
The Association of British Insurers has now said consumers who use these firms are no better off than if they complained independently and for free to the Financial Ombudsman Service.
Chris Kenny, Head of Life and Pensions at the Association of British Insurers (ABI)
told BBC Radio 4's Money Box programme:
"If you look at the results... Those who go direct [to the companies or to FOS] get as good, if a slightly better, uphold rate than those who go via claims companies, and it means they get all the compensation themselves."
However the industry has reacted angrily to the ABI's claims.
Marianne Fitzjohn, director of one of the largest complaint handlers Endowment Justice, said they play a valuable role.
"Trust has been severely damaged and consumers are voting with their feet. They are going to firms like Endowment Justice and asking for help."
The programme spoke to 12 of the biggest complaint handling firms and most told the programme they were happy for the compensation to be paid to the customer anyway.
Consumer groups have described the ABI guidance as misplaced.
Theresa Fritz, principal researcher at Which?, said complaint handling firms are an unfortunate consequence of the industry not treating customers fairly over endowment mis-selling.
"There is no question the fault lies at the industry's door here, but the fact is it's very difficult for consumers to actually judge whether the fee they are paying is a fair fee.
"The big worry I have is that most of these firms can only deal with the very straightforward complaints", in other words, those which are likely to be successful.
But Marianne Fitzjohn denied that happened at her firm.
"We do not cherry-pick cases in terms of their size or who the complaint is against," she said.
BBC Radio 4's Money Box was broadcast on Saturday, 22 October, 2005, at 1204 BST.
The programme was repeated on Sunday, 23 October, 2005, at 2102 BST.