The Chief Executive of Nationwide Building Society wants the Ministry of Justice to closely scrutinise Claims Management Companies (CMCs) who are submitting payment protection insurance claims.
The calls from Graham Beale come after the building society have increased its provision for PPI claims from £16m to £103m.
Nationwide claim one in every three of the complaints it receives is invalid and is citing CMCs as the cause.
Whilst its claims are part true – there is undoubtedly a select number of CMCs who are utilising the PPI mis selling scandal to profit from “bogus” claims – invalid claims do make up only a small percentage.
Recent figures from the Financial Ombudsman Service (FOS) show just 2.5 per cent of 220,000 claims they received last year were false.
Payment protection insurance was mis sold to millions of customers. In many cases the policy was automatically added to the credit agreement without the knowledge or consent of the customer, giving a legitimate reason for the increase in invalid claims.
