S have only themselves to blame for the flood of spurious claims around payment protection insurance (PPI) misselling, the financial ombudsman said yesterday.
Banks have argued claims management companies (CMCs) have launched a deluge of baseless claims on behalf of customers who have never even been sold PPI.
But ombudsman chief executive Natalie Ceeney told MPs that this is the banks’ own fault for spending so long pretending there was no PPI problem, then mishandling many of the claims that were submitted.
“CMCs thrive because the problem built over many years when banks said there was not an issue,” she told the Treasury Select Committee. “And in a quarter of cases [which banks rejected claiming consumers had never bought PPI] we see banks have just not done a proper job checking.”
But she also turned her fire on the CMCs for falsely telling consumers they need help claiming.
“They get a quarter of the compensation just for putting a stamp on an envelope,” Ceeney said.