Financial Ombudsman Chief Natalie Ceeney says that why claims management companies receive at least 50% of the PPI claims compensation package is because banks were not doing their job properly. The Financial Services Authority early this year had tasked banks to call on customers who are potentially mis sold PPI. These includes employees who are protected by employers with sickness repayment funds, not just those ineligible for the insurance policy. However, banks did not perform their job well, having them play into the hands of claims management companies like PPICo.co.uk.
Even if CMCs are subject to public scrutiny, many consumers who were contacted by the companies evaluate if they do have mis sold PPI. About 7 out of 10 cases of mis sold PPI submitted by CMCs to the FOS are claims where the bank’s decision was not satisfactory for the customer. Most people working with CMCs are those who are working or have no time to make a claim, or supposedly those with multiple PPIs sold on loans and mortgages. The FOS boss sees that CMCs actually help by “alerting all customers” while she discourages “cold” calls and text messages.
Natalie Ceeney states that banks are still “dragging their feet” to address the situation, which prompted the customer-bank relations organization to boost their manpower to 3,000 and expanding their work spaces at Canary Wharf. The FOS has also proposed a no-claim payout to allow customers to receive compensation automatically without having to make a claim.
Confederation of British Industry director general John Cridland called for a deadline for making PPI claims, believing that the scandal can get more expensive and time consuming. However, the proposal is still in debate given that banks have not written to customers who they believe have been mis sold PPI and that the volume of PPI mis sold is estimated by experts to be around 34 million for the entire United Kingdom.