Antonio Horta-Osorio, the chief executive of Lloyds Banking Group, has written to the Justice Secretary demanding the ballooning costs of false payment protection insurance claims are shared by the claims management companies that are often behind them.

Mr Horta-Osorio, a strong critic of the false PPI claims, wrote to Chris Grayling to ask him to look at changing the law on who covers the cost of processing claims. Lloyds pays a handling fee of some £850 for administering a claim to the Financial Ombudsman Service. The letter, sent in mid-November, said that while the bank is happy to continue to pay the £850 for cases that are proven to be valid, claims management companies (CMCs) should cover the costs for those they lodge which are proven to be invalid or bogus. Under the current system, Lloyds and its peers have to pick up the Ombudsman’s costs, whether they are found to have mis-sold or not. A source indicated that the letter “focused on the concept that the CMCs are getting a free ride”............Read more here

AAD Blog 1st nov 2012: Lloyds Banking Group raises PPI bill by a further £1bn - allaboutFORUMS

AAD Blog 31st oct 2012:
Banks are wrong on PPI 'fraud', says top ombudsman Natalie Ceeney - allaboutFORUMS

AAD Blog 1st may 2012:
Lloyds makes extra £375m provision for PPI compensation - allaboutFORUMS