Despite claims against mis-sold payment protection insurance (PPI) starting 20 years ago, the year 2011-2012 saw an explosion of such claims. During the year, 157,716 of the 264,375 new disputes received by the Financial Ombudsman Services (FOS) were against mis-sold PPI, equating to a whopping 60 per cent of their total complaints.
However, with this explosion comes a parallel rise in bogus claims. The FOS has revealed that nearly 6,000 of these mis-sold PPI claims were 'frivolous and vexatious', with no PPI actually attached to the product complained about by the customer. Last year, such bogus claims amounted to 2.5 per cent of the total PPI claims, compared to just 0.9 per cent of the previous year.
It is generally believed that this increase in new and therefore bogus claims is down to the growing number of claims management agencies which offer to claim back mis-sold PPI via television adverts. Last year, 69 per cent of all PPI claims received by the FOS were from such agencies and although this figure is high, it is actually lower than the previous year which stood at 76 per cent.
Millions of claims have been made by consumers who bought PPI, believing that they would benefit from the insurance should they fall ill, have an accident or lose their job and therefore be unable to make loan and credit card repayments. However, it has been revealed that many were mis-sold this insurance at they would not have been covered.
Banks have admitted their fault in mis-selling PPI and revealed last year that they have put away millions of pounds each to cover the costs of successful claims; both of which may have resulted in the sudden increase of the agency TV ads. The banks, though, still insist on assessing each individual case to ensure only those mis-sold PPI get their money back, and not the bogus claims, too.
However, with this explosion comes a parallel rise in bogus claims. The FOS has revealed that nearly 6,000 of these mis-sold PPI claims were 'frivolous and vexatious', with no PPI actually attached to the product complained about by the customer. Last year, such bogus claims amounted to 2.5 per cent of the total PPI claims, compared to just 0.9 per cent of the previous year.
It is generally believed that this increase in new and therefore bogus claims is down to the growing number of claims management agencies which offer to claim back mis-sold PPI via television adverts. Last year, 69 per cent of all PPI claims received by the FOS were from such agencies and although this figure is high, it is actually lower than the previous year which stood at 76 per cent.
Millions of claims have been made by consumers who bought PPI, believing that they would benefit from the insurance should they fall ill, have an accident or lose their job and therefore be unable to make loan and credit card repayments. However, it has been revealed that many were mis-sold this insurance at they would not have been covered.
Banks have admitted their fault in mis-selling PPI and revealed last year that they have put away millions of pounds each to cover the costs of successful claims; both of which may have resulted in the sudden increase of the agency TV ads. The banks, though, still insist on assessing each individual case to ensure only those mis-sold PPI get their money back, and not the bogus claims, too.
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