Although the first mis-sold payment protection insurance (PPI) claim was made almost 20 years ago in 1992, this issue has increasingly got worse. In the year 2011-2012, the Financial Ombudsman Service (FOS) recorded an explosion of new PPI claims, with 157,716 out of the 264,375 new disputes that year relating to mis-sold PPI claims; 60 per cent of the FOS's total complaints.
Parallel to this rise, however, was also an increase in bogus PPI claims. The FOS revealed that almost 6,000 of the claims made against mis-sold PPI were 'frivolous and vexatious' as no PPI was attached the product in question. In 2011-2012, these bogus PPI claims amounted to 2.5 per cent of the total PPI claims received by the FOS compared to 0.9 per cent the year before.
It is generally believed that this increase in new and therefore bogus claims is down to the growing number of claims management agencies which offer to claim back mis-sold PPI via television adverts. Last year, 69 per cent of all PPI claims received by the FOS were from such agencies and although this figure is high, it is actually lower than the previous year which stood at 76 per cent.
It has been reported that PPI, which is designed to cover consumers who are unable to make loan or credit card repayments should they fall ill, have an accident or lose their job, has been mis-sold to millions of consumers (who would not benefit from the insurance) over the last two decades.
However, although banks have put away millions of pounds to cover successful claims and have admitted that some of their customers may have indeed been mis-sold PPI (a fact which prompted the rise in TV ads for reclaiming PPI premiums), they have also expressed that they will check every case to ensure that no bogus claim gets through the net and is successful in 'reclaiming' PPI premiums paid.
Parallel to this rise, however, was also an increase in bogus PPI claims. The FOS revealed that almost 6,000 of the claims made against mis-sold PPI were 'frivolous and vexatious' as no PPI was attached the product in question. In 2011-2012, these bogus PPI claims amounted to 2.5 per cent of the total PPI claims received by the FOS compared to 0.9 per cent the year before.
It is generally believed that this increase in new and therefore bogus claims is down to the growing number of claims management agencies which offer to claim back mis-sold PPI via television adverts. Last year, 69 per cent of all PPI claims received by the FOS were from such agencies and although this figure is high, it is actually lower than the previous year which stood at 76 per cent.
It has been reported that PPI, which is designed to cover consumers who are unable to make loan or credit card repayments should they fall ill, have an accident or lose their job, has been mis-sold to millions of consumers (who would not benefit from the insurance) over the last two decades.
However, although banks have put away millions of pounds to cover successful claims and have admitted that some of their customers may have indeed been mis-sold PPI (a fact which prompted the rise in TV ads for reclaiming PPI premiums), they have also expressed that they will check every case to ensure that no bogus claim gets through the net and is successful in 'reclaiming' PPI premiums paid.
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