Calls For Regulation In The Wake Of Bogus PPI Claims, Says PPI Claims Company Missoldppiclaims.info
The Building Society Association is demanding the introduction of regulation to prevent bogus PPI claims being submitted by claims managers, says PPI reclaims company Mis-sold PPI.
Building societies have been inundated with claims from individuals who have never taken out a loan or PPI policy with them, so much so there was an increase in bogus claims of 247% between October 2011 and October 2012.
The Building Society Association believes part of the problem stems from rogue claims companies cold calling individuals at home and offering to get them many thousands of pounds of PPI compensation, even if they have never had a loan or Payment Protection Insurance (PPI) policy with a lender. It estimates that some 22,441 people were deliberately misled by rogue claims firms into believing they had a valid claim and could get hundreds, if not thousands of pounds compensation.
A spokesperson for leading PPI Claims Company; Missoldppiclaims.info said: “This scattergun approach relying on cold calling or sometimes even doorstep selling, is tempting some consumers to ‘have a go’ despite there being very little evidence that any of them will succeed with their claim. To add insult to injury, the claims firms then often send the claim rejected by the lender to the Financial Ombudsman, which then also rejects the claim. At the end of the process the consumer has received nothing, but is often charged for the process, even if they’ve been told it was a ‘no win, no fee’ service.”
Figures from the Financial Ombudsman support this – it paid out around £347m to 86,000 consumers, and reports that nearly 84% of new claims in 2012 were PPI related.
More worrying is the range of tactics that the claims companies are using to get business says the Association. High-pressure sales tactics are being used, particularly with the elderly and vulnerable. It is common for rogue companies to insist on an up-front fee, but fail to tell the consumer that there is very little chance of success with their claim. Some don’t reveal the amount in fees they will take should the claim be successful, with reports of up to 45% + VAT of the eventual award being taken. Even worse, consumers can be lulled into a false sense of security by a ‘no win, no fee’ service, only to find themselves charged if the claim is rejected by the Ombudsman.
The director general of the BSA, Adrian Coles, said: “Much stronger action is needed from the Ministry Of Justice if these companies are to stop misleading consumers and putting a pointless and growing administrative burden on BSA members and the Financial Ombudsman Service.”
The spokesperson also added; “If you are approached by a claims firm offering to get you compensation if you’ve never having taken out a loan or PPI policy don’t be tempted to let them ‘have a go’. Chances are it will backfire and you will be out of pocket.
“If you suspect you have had been mis sold a ppi policy for a loan or credit card in the past and want to use a claim management firm (CMC) to submit a claim it’s important you take the time to carefully choose who you use. Talk to two or three firms and compare what they are offering on issues such as fees, service and how much of the award they will take if you are successful. Make sure you get everything in writing and don’t allow yourself to be persuaded by high pressure selling tactics.”
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