The recent ruling that customers can claim back payment protection insurance (PPI) charges has led to a steep rise in the numbers of consumers putting claims to the courts. Furthermore, it has also led to many bogus claims, with the Financial Ombudsman reporting almost 6,000 such examples in the past twelve months.
Such news is likely to cast a shadow on the fact that PPI compensation claims remain a basic right for all those who have been mis-sold such policies, but the public should not shy away from making a claim.
With almost 160,000 claims put to the Ombudsman in the year – an increase of over 50% on the previous twelve months – the figure for bogus claims is a very small percentage of the total, yet it has still raised concerns. Part of the problem is that many consumers are unable to remember if they had taken out PPI on former loans, and have simply put the claim to the Ombudsman in the hope they did.
The total amount that is likely to be paid out by the banks to genuine claimants is expected to be in excess of £9bn, a colossal amount of money that will certainly exert an effect on the banking industry. Meanwhile, the Financial Ombudsman has had to take on 500 new staff to help process the ever-rising number of claims. In addition, it has been revealed that 64% of claims have been successful in the past twelve months, an increase over the previous year’s figure of 51%.
Claims for mis-sold PPI will continue to rise as more people realise they have been paying into a worthless policy, and the number of claimants is expected to increase in the next year.