The report gives credit to Claims Management Companies for much of the growth in PPI mis-selling complaints to the Financial Ombudsman. In the year to 31 March 2010 a staggering 49,196 compaints about PPI mis-selling were made to the Ombudsman, with 74% of these coming from Claims Management Companies like Forbes Douglas – http://www.forbesdouglas.co.uk.
Aaron Playle, Managing Director of Forbes Douglas commented:
“The vast majority of claims for PPI mis-selling would never have seen the light of day without the efforts of claims management companies like Forbes Douglas – and we’ve still only seen the tip of the iceberg.”
The MoJ report highlights the fact that the Financial Ombudsman upheld PPI complaints in favour of the customer in an astonishing 94% of these cases. The Chief Ombudsman in his 2008/09 report said:
“One of the significant drivers of consumer complaints is the now substantially increased number and activity of claims-management companies, encouraging disadvantaged consumers to complain.
“But it is also undeniable that the marketing activities of claims-management companies have succeeded in identifying a very large number of consumers who have suffered loss. And this has resulted in many people being paid redress when they would otherwise have received nothing.”
Many customers who were sold PPI did not even realise they had bought it at all.
Mr Playle from Forbes Douglas added to these sentiments: “The disgrace is that the banks and other lenders aren’t just ordered to pay back their ill-gotten gains to ALL customers who were sold PPI policies without the need to complain. But until they are, Forbes Douglas will continue its crusade to bring the issue to public attention and to win compensation for the banks’ victims.”
The MoJ report goes on to make five general conclusions:
i. The market for financial claims was created by regulatory action in respect of endowment mis-selling.
ii. As with personal injury, claims management companies have largely eliminated the inertia, search and hassle costs for potential claimants, at the expense of taking a significant proportion of their compensation.
iii. The activities of claims management companies have resulted in more people being able to claims legitimate compensation in respect of endowment mis-selling.
iv. The PPI claims market would be much smaller without claims management companies, as many of those people to whom the product has been mis-sold are not even aware that they have the product.
v. In the financial services market claims management companies have made a significant contribution to increasing access to justice; regulation has assisted this process by limited the scope for malpractice by claims management companies.
Commenting on these conclusions Mr Playle said:
“As one of the UK’s leading claims management companies Forbes Douglas is at the forefront of obtaining compensation for PPI mis-selling. This report is a vindication of the overall success of regulation of our industry and demonstrates there is no longer room for the cowboys who would give it a bad name.”
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About Forbes Douglas. Forbes Douglas is a Claims Management Company regulated by the Ministry of Justice in respect of regulated claims management activities. Forbes Douglas specialises in consumer complaints about misselling of Payment Protection Insurance. Website for more information http://www.forbesdouglas.co.uk/