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FOS receives over 5,600 false PPI complaints

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, figures from the FOS reveal.

The FOS has published its annual review this morning, which sets out complaints trends for the 2011/12 financial year.

Its figures show that out of the 222,333 complaints resolved during the year, 5,667 cases – 2.5% of the total – were classed as “frivolous and vexatious”, compared to 0.9%in the previous year.

99% of frivolous and vexatious complaints were about missold PPI where no policy was in place.

The FOS received 157,716 complaints about PPI, up 51% compared to the 104,597 PPI cases as at the end of March 2011. PPI now accounts for 60% of the FOS’ workload.

Claims management companies brought 46.5% of cases to the FOS on behalf of consumers, compared to 42.5% of complaints made by consumers themselves.

The FOS says: “During the year we have again seen some claims management companies taking a disappointingly lax approach to completing the questionnaire on behalf of consumers.

“Where a form is completed inaccurately, or not at all, we may not be able to progress the complaint. We have made our position on this very clear to the claims management companies in question, And we have required a number of them to withdraw their complaints and to re-complete the questionnaires again in full.”

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

It adds: “We have also continued to see a significant number of cases where, after investigation, it emerged that no PPI policy had ever been in place.

“It is essential that businesses and claims management companies make every effort to check this before the matter is referred to the ombudsman service.”

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  • Liz 24th May 2012 at 9:48 am

    I feel totally harrassed by PPI claims recorded messages cold calling me 24-7 I can’t even avoid them at work (as an IFA and my part time work in a bar too!) – Surely repeatedly ringing the same number with these irritating messages is intrusive and should be banned. I think its safe to say that once you have called 2 or 3 times and the person has put the phone down they do not want to receive the PPI recorded message again! It seriously annoys me so much!

    And I agree with the comments above, trying to make a false claim is attemtped fraud and these people (and certainally the firms who put in claims on people’s behalf – they can hardly cry the ‘oh i didn’t know I am just an idiot consumer!’ card, goven that it is their bread and butter) should be reported to the police – if there is no PPI policy then trying to claim is surely attempting to obtain money by deception.

    Obviously there are genuine claims too – I myself declined PPI on a credit card (as I always do as I have PHI) and the caompany put it on there anyway. Banks have mis-sold or just been plain deceiptful in some cases like mine (complained verbally to my bank and it wasn’t even acknowledged, charming!) but I bet a heck of a lot more are not geniune than are.

    Oh, and I expect that headline FOS number is actually higher for fraudulant claims, if they took into account the ones (and we will never know) who are lying saying my adviser told me I had to have that insurance (yes banks may have but I doubt everyone did) it would be WAY higher.

  • Liz 24th May 2012 at 9:47 am

    I feel totally harrassed by PPI claims recorded messages cold calling me 24-7 I can’t even avoid them at work (as an IFA and my part time work in a bar too!) – Surely repeatedly ringing the same number with these irritating messages is intrusive and should be banned. I think its safe to say that once you have called 2 or 3 times and the person has put the phone down they do not want to receive the PPI recorded message again! It seriously annoys me so much!

    And I agree with the comments above, trying to make a false claim is attemtped fraud and these people (and certainally the firms who put in claims on people’s behalf – they can hardly cry the ‘oh i didn’t know I am just an idiot consumer!’ card, goven that it is their bread and butter) should be reported to the police – if there is no PPI policy then trying to claim is surely attempting to obtain money by deception.

    Obviously there are genuine claims too – I myself declined PPI on a credit card (as I always do as I have PHI) and the caompany put it on there anyway. Banks have mis-sold or just been plain deceiptful in some cases like mine (complained verbally to my bank and it wasn’t even acknowledged, charming!) but I bet a heck of a lot more are not geniune than are.

  • Bill 22nd May 2012 at 4:57 pm

    Why is this attempted fraud or obtaining pecuniary advantage by deception not being reported to the Police (who can decide upon the offence better than I)? One successful prosecution and some media coverage would save the FOS and therefore ultimately consumers probably hundreds of thousands of pounds. Those thinking of trying it on would not be splurging on the compo not yet received and thereby creating further problems and as for the claims firms – charge them with aiding and abetting or assisting an offender (again Police / CPS to decide). Of course this won’t happen as rampant consumerism which now includes blatant criminality is king and the regulator doesn’t really care one jot. It is all really quite pathetic, again I doubt they care trundling along in the DB gravy train on their way to other sunnier climes or top accountancy jobs. Quite sad really.

  • Dave 22nd May 2012 at 4:32 pm

    The figure of 5,600 bogus claims is disgraceful but the fault can be traced directly back to the FSA.

    It discredited all PPI policies with its ill-informed and ill-considered pronouncements about a situation that was entirely predictable but it simply did not understand.

    Ever since it took over control of mortgages and insurance, the regulator has over-reacted, in knee-jerk fashion, to situations it could and should have anticipated if it had been worth its salt.

    The costs it has imposed on the industry are astronomic and the impact has been almost exclusively negative.

  • Bill Wells 22nd May 2012 at 4:28 pm

    The FOS should have the power to fine the claims company (big fines) if the claim is found to be fraudulent. IFAs have to cover the cost of the FOS workload that these crooks are causing and it makes my blood boil.

    Such firms should not be allowed to advertise…..solicitors are as bad these days and they are supposed to be professionals – don’t make me laugh ! Moreover, why are the claims firms allowed to cold call (I receive 5 or 6 calls every week telling me that I can claim mis-selling of PPI or “have I received an injury that might be someone else’s fault?” – I’m fed up telling the caller to **** off ! and to take my name off their calling list.

    The whole regulatory framework needs to be dismantled – it is costing the public dear if only they knew it !

  • Incompetent Regulators Award Team 22nd May 2012 at 4:12 pm

    The FOS is and has been riddled with fraudulent claims for years. If a £250 fee was introduced to lodge a complaint (refundable on a client winning a case), the FOS would collapse as we know it. I suspect at least 80% are dodgy.

    I know and I have evidence from x-employees who didn’t like to flawed system they use. Nothing new here, just a political tool to win votes from compo chasers.

  • Derek Bradley ceo PanaceaIFA 22nd May 2012 at 4:09 pm

    The UK seems to have developed a habit of expecting someone to pay them something irrespective of the merits of the claim in question. This mindset is made worse when we hear that police forces and even insurance companies are selling accident data to claims management firms for a fee.

    Jonathan Djanogly, the justice minister, said recently “ministers would look at several practices – including referral fees, touting for business by text message and garages selling lists of drivers involved in accidents”.

    He felt that these were “the symptoms of a rotten suing culture rather than the cause”. He went on to observe, “frivolous claims were encouraged by the fact that claimants need not pay for legal action, even if they lost their case”.

  • Russell Cook 22nd May 2012 at 4:09 pm

    FSA inspired fraud. Pure and simple.

  • Stuart Duncan 22nd May 2012 at 12:13 pm

    The FOS should be reporting the guilty CMCs to the MoJ and also to the Police.

    Any adviser falsely accused is a victim of crime in my opinion.

    As stated in John’s post, the CMC invented the claim to obtain money under false pretences and FOS should do more than just send the form back. They are letting down the industry and, indirectly, the public.

  • Andy 22nd May 2012 at 11:56 am

    I had a phone call last week from one of the companies and I explained that I had never taken out a PPI policy as I am adequately covered by IPP. They informed me that I’m still eligable to claim as most banks were charging more interest on loans when you didn’t take their PPI??
    I see where they go the words “frivolous and vexatious” from!!

  • john 22nd May 2012 at 11:20 am

    really! what a shock! i got one the other day, young girl worked in NHS, we had a brief chat, did life and CIC, no PPI as pointless. 18 moths later later from a CMC, you sold a plan, she had sick pay, you told her she needed this to get the loan. worse was they had written to lender, who told them i was the ifa, and the “associated” plan must have done by me!

    called the client, oh i signed one of these forms for information, didnt think they would complain, can you callthem for me, i did – oh send us a letter confirming no PPI is in place – should the not check that first???