Ministry of Justice launches investigation into PPI claim companies

dunstonh

http://www.moneymarketing.co.uk/regulation/ministry-of-justice-launches-investigation-into-ppi-claims/1048810.article

I have pasted the article below and just highlighted some things that has been observed by some before on this website....

The Ministry of Justice has launched an investigation into claims management companies after a wave of invalid compensation claims on behalf of customers allegedly mis-sold payment protection insurance. According to the Financial Times, the move comes after the ministry received a number of complaints from banks over the issue.

Around 80 per cent of PPI claims now come through claims management companies. The FT reports that a vast amount of these complaints are now being rejected.
Santander UK said 40 per cent of the claims it was now receiving were invalid, while Barclays estimated invalid claims at 40-50 per cent. HSBC said that of the claims submitted by claims management companies, a third either had no link to the bank, or no PPI policy had ever been bought. Lloyds is dismissing approximately a third of its claims, while Royal Bank of Scotland says it is rejecting a fifth of claims.

Banks have made a provision of around £6bn for mis-sold PPI, with £1.9bn paid out in 2011. Lloyds has made the largest provision for mis-sold PPI, having set aside £3.2bn.

[Deleted User]

Yes, the Ministry of Justice needs to act to stem the flow of these ridiculous and deliberately fraudulent "claims". The CMCs are obviously signing up anyone who will let them on the promise of "compensation" regardless of whether they even had a loan or credit card with PPI! The massive proportion of any redress they charge for their "services" should, at the very least, mean that the CMCs should be required to check the validity of complaints before they submit them to Banks or the FOS.
Charging a refundable deposit on CMC submitted claims would stop these invalid claims in their tracks I think.

magpiecottage

Moneyineptitude wrote: »

Charging a refundable deposit on CMC submitted claims would stop these invalid claims in their tracks I think.

I agree - but that would need joined up thinking and, I suspect, unsettle the FOS empire.

The problem is that neither the ambulance chaser nor the complainant has anything to lose by trying it on - and now they can blackmail a small IFA or mortgage adviser with the prospect of a fee of £850 just to be told they have no case to answer.

[Deleted User]

magpiecottage wrote: »

The problem is that neither the ambulance chaser nor the complainant has anything to lose by trying it on

Exactly.
I don't agree that complainants acting alone should have to pay any deposit, but CMCs being forced to would at least do something to stop the Banks being inundated with scurrilous complaints and so alleviate the delays to valid claims being attended to.

~Brock~

Moneyineptitude wrote: »

Exactly.
I don't agree that complainants acting alone should have to pay any deposit, but CMCs being forced to would at least do something to stop the Banks being inundated with scurrilous complaints and so alleviate the delays to valid claims being attended to.

Funnily enough, when the Financial Ombudsman Service enlisted the help of Lord Hunt to conduct a full review of the service in 2008, he recommended exactly that!!

http://www.financial-ombudsman.org.uk/news/Hunt_report.pdf
(Page 70)

[Deleted User]

~Brock~ wrote: »

Funnily enough, when the Financial Ombudsman Service enlisted the help of Lord Hunt to conduct a full review of the service in 2008, he recommended exactly that!!

http://www.financial-ombudsman.org.uk/news/Hunt_report.pdf
(Page 70)

That was long before the "floodgates" were opened, of course. Pity they didn't instigate the proposal then.

sean_haran

We had a call today from the above company advising us that they work on behalf of the government and had a cheque worth over £4000 made payable to my wife. They said they would deliver this at 4.00pm and asked my wife to pay £300 into a Halifax bank Account, obtain a receipt and hand over the receipt when the gentleman arrived with the cheque.

We declined to do this, had a number of calls from a gentleman asking if we had done this and telling us that he would not come to our house until it had been done.

When we asked why we had no received nothing in writing, they claimed that they had. When we asked what would happen if we did not pay the £300+ up front, we were told that the £4000+ would be given to charity. When we asked why they could not make the payment NET of the £300+ fee, we were told that they could not alter the cheque that they had.

has anyone else experienced this ?

Look forward to hearing from you !

[Deleted User]

Let them give it to "charity". It's an obvious scam. Ignore.

dunstonh

has anyone else experienced this ?

Its a common claims company fraud and the sort of thing that the ministry of justice will be looking into.