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Over 5,600 ‘phantom’ policy PPI claims

Over 5,600 complaints about missold payment protection insurance were referred to the Financial Ombudsman Service last year where no policy had ever been sold.

The ombudsman service published its annual review this week, which sets out complaint trends for the 2011/12 financial year.

It show that out of the 222,333 complaints resolved during the year, 5,667 cases, or 2.5 per cent of the total, were classed as “frivolous and vexatious”. This compares with 0.9 per cent in 2010/11.

Around 99 per cent of frivolous and vexatious complaints were about missold payment protection insurance where no policy was in place.
The FOS received 157,716 complaints about PPI, up by 51 per cent compared with the 104,597 PPI cases in 2010/11. PPI now accounts for 60 per cent of the FOS’s workload.

Claim management companies brought 46.5 per cent of cases to the FOS on behalf of consumers, compared with 42.5 per cent of complaints by consumers themselves.

The FOS says it has seen some claim management firms adopting “a disappointingly lax approach” to completing questionnaires to submit complaints on behalf of consumers.

It says it is both “frustrating and time-consuming” where the facts of the case are only established after it is referred to the service.

Highclere Financial Services partner Alan Lakey says: “PPI has been a feeding frenzy for claim management firms. The kind of ’fishing expedition’ approach some firms take should be made illegal.”

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Comments

There is one comment at the moment, we would love to hear your opinion too.

  1. There’s no doubt that constant tv, radio and newspaper ads are making people claim through companies, that said it’s useful for the banks to have a villain to point the finger at. I read a claims companies viewpoint which may be interesting to those who like a balanced story, http://www.ppiclaimform.co/ppi-claims-news/ppi-claims-hypocrisy-from-media/

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