6,000 bogus PPI claims recorded


Nearly 6,000 bogus payment protection insurance (PPI) compensation
claims were made to the ombudsman last year, figures showed today.

The Financial Ombudsman Service (FOS) settled a record 222,333 disputes generally during the financial year 2011/12, of which 2.5 per cent or 5,667 cases were found to be "frivolous and vexatious".

Some 99 per cent of these unfounded cases involved complaints about mis-sold PPI, where it emerged that no such policy had actually been sold, the FOS said.

Only 0.9 per cent of complaints generally made to the FOS, or just over 1,000 cases, were found to be "frivolous" in the previous financial year.

PPI was sold along with loans and credit cards to cover illness and unemployment, but a widespread mis-selling scandal emerged and around £9 billion is being paid back to consumers.

Claims management companies, which typically take around a quarter of any payout to consumers, have been accused of exploiting the widely-publicised compensation drive.

Consumer groups and the ombudsman have emphasised that people are just as likely as a claims management company to be successful in making a claim if they initiate it themselves.

The FOS said that the increased number of bogus cases reflects the record number of PPI complaints received by the ombudsman last year.

It received 157,716 complaints about PPI in the financial year 2011/2012, the highest number of complaints it has ever received in a single year about a financial product. This figure also accounted for nearly two thirds of disputes.

Just under seven out of 10 PPI claims that ended up before the ombudsman were initiated by claims management companies, down on three quarters the previous year.

Chief Financial Ombudsman Natalie Ceeney said: "I think it's perfectly understandable for people to ask their bank; 'Did I have PPI?'

"At the same time we are seeing consumers being very badly misled by claims management companies."

She added: "Some of them, at their worst, are taking upfront fees and the consumer is losing out. They never had a policy and they are worse off than if they had done nothing."

The FOS also released figures in its annual review today which showed that 64 per cent of consumers received compensation in the cases it settled last year.

The ombudsman received more than 1.2 million customer inquiries, equating to more than 5,000 each working day. One in five of these became formal disputes, amounting to a record 264,375 new cases, up by 28 per cent on the previous year.

Aside from PPI complaints, the number of investment-related complaints fell by 4 per cent and banking complaints declined by 1 per cent.

The review said that the ombudsman was continuing to see many "entrenched" disputes which could have been avoided with better communication.

It said: "We also see some businesses responding to customer concerns unhelpfully and defensively - aggravating problems that a clear, helpful and sympathetic explanation might have resolved."

Sarah Brooks, director of financial services at Consumer Focus said: "PPI continues to be a thorn in the side of this industry.

"With all that has happened, consumers shouldn't need to take their PPI claim to the ombudsman to get their money back."

Which? executive director, Richard Lloyd said: "With over £9 billion set aside for PPI redress, it's essential that barriers that prevent people getting redress are removed, and quickly."


Life and Style
love + sex A new study has revealed the average size - but does that leave men outside the 'normal' range being thought of as 'abnormal'?
The Palace of Westminster is falling down, according to John Bercow
voices..says Matthew Norman
Steve Bruce and Gus Poyet clash
Arts and Entertainment
Jake and Dinos Chapman were motivated by revenge to make 'Bring me the Head of Franco Toselli! '
arts + ents Shapero Modern Gallery to show explicit Chapman Brothers film
Arts and Entertainment
Kurt Cobain performing for 'MTV Unplugged' in New York, shortly before his death
music Brett Morgen's 'Cobain: Montage of Heck' debunks many of the myths surrounding the enigmatic singer
Brendan Rodgers
football The Liverpool manager will be the first option after Pep Guardiola
Life and Style
Christian Benteke of Aston Villa celebrates scoring the winner for Aston Villa
Arts and Entertainment
Myanna Buring, Julian Rhind-Tutt and Russell Tovey in 'Banished'
TV Jimmy McGovern tackles 18th-century crime and punishment
Arts and Entertainment
Paul Whitehouse as Herbert
arts + ents
Bill O'Reilly attends The Hollywood Reporter 35 Most Powerful People In Media Celebration at The Four Seasons Restaurant on April 16, 2014 in New York City
media It is the second time he and the channel have clarified statements
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Sales Executive - OTE £40,000

    £15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...

    Austen Lloyd: Law Costs HOD - Southampton

    £50000 - £60000 per annum + Excellent Salary: Austen Lloyd: An outstanding new...

    SThree: Recruitment Resourcer

    £20000 - £21000 per annum + uncapped commission: SThree: As a graduate you are...

    Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

    £25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

    Day In a Page

    Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

    Climate change key in Syrian conflict

    And it will trigger more war in future
    How I outwitted the Gestapo

    How I outwitted the Gestapo

    My life as a Jew in wartime Berlin
    The nation's favourite animal revealed

    The nation's favourite animal revealed

    Women like cuddly creatures whilst men like creepy-crawlies
    Is this the way to get young people to vote?

    Getting young people to vote

    From #VOTESELFISH to Bite the Ballot
    Poldark star Heida Reed: 'I don't think a single bodice gets ripped'

    Poldark star Heida Reed

    'I don't think a single bodice gets ripped'
    The difference between America and Israel? There isn’t one

    The difference between America and Israel? There isn’t one

    Netanyahu knows he can get away with anything in America, says Robert Fisk
    Families clubbing together to build their own affordable accommodation

    Do It Yourself approach to securing a new house

    Community land trusts marking a new trend for taking the initiative away from developers
    Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

    David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

    The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
    Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

    Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

    Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
    With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

    Money, corruption and drugs

    The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
    America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

    150 years after it was outlawed...

    ... America's first slavery museum is established in Louisiana
    Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

    Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

    The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
    Tony Oursler on exploring our uneasy relationship with technology with his new show

    You won't believe your eyes

    Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
    Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

    Moores must go. He should never have been brought back to fail again

    The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
    War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

    The battle for Mosul will unleash 'a million refugees'

    Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn