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The number of allegations of PPI fraud have increased substantially over the past few months. Between October and December of 2011, the number of PPI claims increased by more than 50%. Within those three months, the number of customers claiming they were mis-sold PPI reached a staggering 30,301.
As concerning as that number of claims is, it only represents a third of al the claims received over the course of 2011. Many experts are concerned that nearly 100,000 PPI claims have been issued over the past year.
Although the number of claims issued increased substantially, not as many are being successfully raised by consumers. Between July and September, almost all of the claims that were raised were made in favor of customers. In more recent months, only a little more than two-thirds of these claims were made in the customers behalf.
The growing number of concerns continues to raise some questions over the practice of using PPI claims by large financial institutions. About 6.5 million PPI packages are issued each year. However, almost 1 million people complained with banks and other financial institutions last year about the way those claims were sold or how they were structured.
The Financial Ombudsman is concerned about how much it costs to handle all of the PPI cases coming to its desks. Therefore, it has proposed issuing a fee for all firms receiving more than 25 cases each year. This fee would include both a supplemental and standard case fee, which would collectively amount to £850.
According to the chief financial ombudsman, the Ombudsman is facing steeper expenses over handling these PPI claims than ever before. They are going to have to find a way to manage them, as the PPI caseloads over the course of 2012 and 2013 are expected to make up 60% of the cases they Ombudsman has to oversee. It is estimated that they will need to deal with approximately 165,000 PPI cases over the course of the next two years.
However, she cautions that there is no way of predicting exactly how many claims they are likely to receive over the next couple of years. That figure could be significantly higher or lower, depending on trends with PPI and developments in the market.
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