PPI claims firms pocket £5bn, for no reason
Even though you can make your PPI compensation claims yourself (here's how), it looks like claims firms have been cleaning up.
The National Audit Office (NAO) have crunched the numbers, and they say that claims management companies have pocketed themselves £5bn from PPI compensation, which is nearly a quarter of the money coughed up so far.
While looking at whether or not there's been any real reduction of misselling, the NAO added that they were worried about the popularity of these claims companies, who get you your PPI compo, even though consumers can do it themselves, for free.
As banks are being made to look back at claims that were initially dismissed, this is as pertinent as ever. The watchdog says that there's a backlog with the Financial Ombudsman Service of 40,000 cases, and now, these complaints are taking three times longer to process, than when this all kicked off in 2011.
Some banks have been accused of stalling, hoping that those making complaints will just give up, and there's further concerns that the Government's pension reforms are going to see a new wave of claims against misselling. Irritatingly for everyone, the NAO say that they've not really seen any evidence that the FCA's efforts to stop misselling is working.
You may recall that there was supposed to be a review of banking culture, headed up by the FCA, but they decided to not bother. The regulator's new chief executive Andrew Bailey, said that there's going to be a more softly-softly approach to the whole thing.
NAO head Amyas Morse said: "Legislative restrictions limit my access to information that the FCA holds on firms, making it impossible to draw definitive conclusions on its approach. The information my staff could see, such as customer complaints, does not show any clear reduction in the extent of mis-selling."
"The FCA cannot be confident that its actions are reducing the overall level of misselling, and it has further to go to show it is achieving value for money."
The FCA replied: "It is unlikely that misselling could ever be eliminated completely. Our aim is to avoid and minimise it as far as possible, create the right incentives and culture in firms and to ensure appropriate redress for consumers and regulatory penalties for poor conduct are put in place when it occurs."