According to the Ombudsman’s annual report, claims management companies (CMCs) share most of the blame for fraudulent complaints.
“During the year we have again seen some claims-management companies taking a disappointingly lax approach to completing the questionnaire on behalf of consumers,” it read.
“We have also continued to see a significant number of cases where, after investigation, it emerged that no PPI policy had ever been in place.
“We have made our position on this very clear to the claims-management companies in question – and we have required a number of them to withdraw their complaints and to re-complete the questionnaires again in full.”
The quality of complaints submitted by CMCs also varies “significantly”.
“Some provide clear and cogent arguments on behalf of the consumer. Others simply make general allegations, some of which have no relevance to the individual dispute,” the Ombudsman said.
Complaints levelled by CMCs made up 46.5% of the Ombudsman’s workload.
Six companies accounted for 51% of all the cases the FOS handled during the year where consumers were represented by this type of company. The other 49% of cases involved more than 500 other claims-management companies.
Advisers have been critical of the claims regulator the Ministry of Justice, following a spate of allegedly fraudulent complaints against IFA businesses.
The Ombudsman admitted it was powerless to prevent fraudulent claims, though representatives met regularly with the larger claims management companies and their trade associations.
