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If you were mis-sold payment protection insurance, firms are desperate for a slice of your compensation.It's free money, and all you have to do is press "yes" to claim – or so say the millions of spam messages that hit mobile phones almost daily. "It's important! Our records indicate you may be entitled to £3,450 from mis-sold loan insurance! To claim reply YES to this message. Thank you!" Or "Urgent! If you took out a bank loan prior to 2007 then you are almost certainly entitled to £2,300 in compensation."What the messages don't tell you is that the claims company will rake off about a third of any "winnings". And nor do they tell you that you can just as easily do it yourself, without having to pay a middleman. Excessive fees and unscrupulous practices have sparked fears of a fresh debacle in the £8bn payment protection insurance mis-selling saga, as victims lose out again, this time to the voracious claims management companies (CMCs). More than 800 such companies have sprung up in recent years to grab a share of the billions that banks are paying out in compensation. Exact figures are not available, but critics estimate that at least £1bn, and maybe up to £2bn, will be pocketed by the claims companies and the legal firms behind them.
The major high street banks say that about 45% of all the PPI claims they are processing are being sent in by claims management companies. This week Lloyds boss Antonio Horta-Osorio said one in four of the claims made against it were fraudulent, putting the bank in a rare alliance with consumer groups such as Which? who are furious at how CMCs have exploited the PPI scandal....Read more here--: The hidden costs of 'free' PPI awards | Money | The Guardian
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Type PPI into Google and PPIClaimback.co.uk is also the first of several websites to appear, all offering to help victims of payment protection insurance mis-selling to get back the thousands of pounds the banks owe them. Of course, there is only one problem with this. A lot of people were not mis-sold PPI by the banks. More than that, many customers never even bought the sorts of products from the banks that had PPI attached. For the banks, which have so far set aside in excess of £5bn to pay compensation claims, this has created a massive administrative headache.
At Lloyds Banking Group, where nearly £3.6bn has been put into a provision fund to pay out claims, one out of every three claims received has turned out to be, in the words of the state-backed lender's chief executive, Antonio Horta-Osorio, "bogus". Normally a model of restraint, Mr Horta-Osorio did not tame his language last week, as he hit out at what he said were the fraudulent practices of some claims managers. "It is fraud and I think we should stop that," he said.....Read more here--: The claims companies riding the PPI gravy train