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Claims firms account for 72% of FOS PPI complaints

Claims management companies brought a massive 72 per cent of payment protection insurance complaints to the Financial Ombudsman Service over the last year.

The FOS’ annual review, published today, shows that claims firms accounted for 72 per cent of 399,939 complaints about missold PPI referred to the FOS in the year to the end of March. This compares to 57 per cent in 2013.

The FOS says just 10 claims firms accounted for 40 per cent of cases handled during the year, with around 500 claims firms accounting for the remainder.

The FOS says: “We do everything we can to make our service as straightforward as possible to use. And once again this year, we found no evidence that complaints brought by a claims manager were any more likely to be upheld.”

The organisation says it sometimes has to explain to consumers that the FOS is not responsible for handling complaints about claims managers. Complaints about claims firms will pass from the Ministry of Justice to the Legal Ombudsman later this year.

The FOS adds: “We do everything we can to make sure claims managers understand how we work – so that our dealings with them are as efficient as possible, and so their involvement doesn’t hinder the progress of consumers’ complaints.”

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Comments

There are 6 comments at the moment, we would love to hear your opinion too.

  1. Philip Milton 20th May 2014 at 9:34 am

    So 72% of complaints brought through Claims Chasing firms. That means of any successful compensation cases from these, 72% of the complainants are not seeing their appropriately due and eligible compensation because one-third of the award sums is going to these entities when there is a totally free service available via the Financial Ombudsman Service.

    When will this multi-billion pound miss-selling scandal be investigated and exposed?

  2. It would be more accurate to say that without claims companies 72% of people would never see a penny from the banks. Lets be honest the banks are not queuing up to pay the money back. In fact according to our research they have used the six year rule, dissolved companies and the line “we never sold the insurance” to avoid paying back more PPI money than they have paid out to date. CMC’s are a necessary evil. Finally one point with respect to ‘totally free’ service, if we win cases that FOS turn down or give the wrong advice on what are we doing right that FOS is doing wrong.

  3. @Philip Milton

    Under the MoJ guidelines, claims firms must make prominent that potential clients may refer to FOS for a free independent service and their chances of success will be the same whether or not they use a CMC.

    Whilst you may not like CMC’s, there are many who make clear the fees charged (and these are often below the one third figure quoted) and the services offered. Speaking from my own experience our customers are those who have neither the time nor inclination to pursue their own claims. We also have many clients who have previously tried to complain to the banks and the lenders have failed to engage with them.

    As always I will caveat that there are too many CMC’s who don’t operate professionally and I encourage everyone to report their conduct to the MoJ, just as I have done in the past.

  4. @ David Soutter.

    Your premise assumes that every one of the 72% was mis-sold.

    Surely we are all aware that this fiasco has become a free-for-all where everybody claims mis-selling in the hope of getting something. Many firms don’t even investigate but simply cough up the cash.

    The cost of investigation is often greater then the compensation and the resulting freebie then galvanises yet more claims mongers and opportunists to stick their snouts in the trough.

    Regulation didn’t save the real victims of PPI mis-selling but it has assisted the millions who have committed fraud and received undue compo.

  5. Alan, For once I agree with you. There is not correlation other than the FOS figure of successful claims over refused claims is due out. Our FOS success rate is about 78% and a further 11% on appeal to FOS.

    I think the payment over investigation suggestion does not hold water as the refund (compensation is not the correct word) is of monies paid to the defendant firm plus interest etc. This calculation is largely completed by the defendant.

    Can I tell you one real concern that all of is all associated financial services companies should be aware and that is the FCA. They are blundering around and in my opinion and risk damaging the FS industry through not actually knowing what they are doing. One quick example. 48,000 plus CCL licences have been issued with interim permission. The new rules will require all firms to have an Approved Person in place for the new applications in the Autumn. In their own estimation they will have to interview and approve between 100,000 and 150,000 people to fill these posts. When asked about the resources and ability to complete this self appointed task their eyes glaze over and they change the subject.

  6. Julian Stevens 20th May 2014 at 7:49 pm

    I’d rather have a Romanian family living next door than a bunch of CMC parasites.

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