Since publishing losses of £583 million back in November as a result of issuing ppi refunds to compensate millions of customers for the mis-selling of payment protection insurance, Lloyds TSB chief executive Antonio Harta-Osorio has been hitting the headlines again with his opinions about claims management companies. It has been reported recently that the Lloyds chief is now criticising CMC's for sending 'bogus' ppi claims to the FOS which are delaying valid claims and clogging up the system - and he says the CMC's should pay.
For every claim that is submitted to the Financial Ombudsman Service in relation to the mis-selling of payment protection insurance, win or lose the Bank defending the claim has to pay an £850 case fee to the FOS. The system's fairness has been questioned many times from all sides of the industry and now it seems that chief executive of Lloyds TSB Antonio Harta-Osorio has had enough. He has written a letter to justice secretary Chris Grayling saying that claims management companies should pick up the bill if the claim is 'invalid' or 'bogus'.
As a result of the Lloyds TSB chief's actions, it has been reported that the Ministry of Justice has entered into talks with the British Bankers Association about who should pick up the bill for false claims submitted to the FOS. The present system clearly favours the claimant over the defendant because if the claimant's complaint is not upheld, they pay nothing whereas the defendant pays £850 even if they win.
Mr Osorio's argument would be more credible were it not for the fact that in 25% of cases where his bank tells their customers they 'could not locate any PPI' attached to the loan or credit card, the Ombudsman does in fact go on to uncover that a policy did exist. It could be argued that if a claims company submits the claim to the FOS after the bank has said 'no policy exists' then they are submitting 'bogus' or 'invalid' claims. However, the uphold rate of 25% surely means that the CMC's are acting in the client's best interests by taking the claim further.
Therefore, if the Banks get their way and the FOS starts charging the claimant for 'bogus' or 'invalid' cases, many claims companies will be put off submitting cases where the bank has said they could not locate a policy - and therefore 25% of consumers will miss out on redress that statistics prove they are probably due.
To submit your PPI claims on a no win no fee basis call UK Money Solutions today on 08000 748 059. We will take your claim all the way to the Ombudsman on your behalf if we consider you have a good chance of success of being awarded PPI refunds by the FOS. You can start your claim online by clicking HERE.