Lloyds Banking Group is pushing for a change in the law to force claims management firms to cover the cost of lodging invalid or bogus payment protection insurance misselling claims.
Lloyds chief executive Antonio Horta-Osorio has written to justice secretary Chris Grayling saying while the bank is prepared to continue to pay its £850 case fee to the Financial Ombudsman Service for legitimate PPI claims, claims firms should face a penalty if cases are filed inappropriately.
Following Horta-Osorio’s letter, the Ministry of Justice is understood to be in talks with the British Bankers’ Association to discuss who covers the cost of false claims.
In April, the FOS introduced a £350 supplementary case fee for PPI complaints to the FOS where businesses have more than 25 PPI complaints a year. The standard case fee is set to rise from £500 to £550 in April, with the number of free cases increasing from three to 25.
Clearwater Financial Planning managing director Duncan Carter says: “I am no great apologist for the banks which have ruthlessly missold PPI over the years but, on this particular point of principle, Lloyds is right.”
A Lloyds spokeswoman says: “There is no deterrent for CMCs to properly evaluate their claims before submitting them.”