Selasa, 01 Mei 2012

PPI mis-selling victims lose £80million to pushy claims firms

PPI mis-selling victims lose £80million to pushy claims firms

By Lauren Thompson

PUBLISHED: 19:05 EST, 1 May 2012 | UPDATED: 20:00 EST, 1 May 2012

Thousands of victims of payment protection insurance (PPI) mis-selling are set to miss out on £80million-worth of compensation this year alone.

The money is going straight into the pockets of unscrupulous claims management firms instead of people who paid years worth of premiums for insurance cover they didn’t need.

Claims firms promise to secure refunds of PPI, a type of insurance supposed to cover payments of credit cards and loans if you fall ill or can’t work.

PPI mis-selling: The FOS says eight out of ten complaints are brought by claims firms, which typically pocket a third of the compensation paid out

PPI mis-selling: The FOS says eight out of ten complaints are brought by claims firms, which typically pocket a third of the compensation paid out

The firms bombard people with cold calls and text messages promising payouts worth thousands of pounds. But they typically pocket a third of the compensation paid out.

The Financial Ombudsman Service (FOS), which settles disputes between banks and consumers, is expecting to receive a record 165,000 complaints about PPI this year.

Lloyds Banking Group, which includes Halifax and Bank of Scotland, announced it was putting aside a further £375million to pay for PPI compensation, bringing its total compensation bill to £3.6billion.

Last week, Barclays raised its provision for PPI compensation by setting aside an extra £300million, pushing its total to £1.3billion.

The FOS says eight out of ten complaints are brought by claims firms. With the average compensation at £2,750, if each firm took a third they are in line to pocket £80million. Last year, claims firms took an estimated £50million of consumers’ compensation.

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