Half of PPI complaints via claims firms 'never had a policy'

This is an increase from the previous figure of one in three in the previous three months.

But of customers who made complaints directly for free - without using a CMC - only one in five were found not to have a Lloyds PPI policy.

To find out whether you have had a PPI policy, contact your bank. Nationwide recently introduced an online enquiry form to help with this.However, if your bank rejects your complaint - or wrongly denies you had a PPI policy - you have a right to escalate the complaint to the free Financial Ombudsman. See our Reclaim PPI for Free guide.

A Lloyds source told MSE that these 'no PPI' claims, plus other CMC activities that don't help consumers, will require 1,000 extra staff over the course of the reclaiming process.

This news comes as Lloyds announced it is setting aside another £700 million to compensate people mis-sold payment protection insurance, increasing its total pot to pay for reclaiming to over £4 billion.

Half of all complaints to Lloyds about mis-sold PPI made go via claims firms, who often charge 30% of the compensation - £930 on a typical £3,100 payout.

However it is simple to do this yourself, for free. MoneySavingExpert.com joined forces with consumer group Which? back in April to increase awareness of how easy it is for consumers to reclaim mis-sold PPI and pay nothing.

In total, £4.8 billion has been paid back to customers who were mis-sold the insurance since January 2011.

Claims firms often bombard consumers with texts, calls and emails urging them to reclaim. As these are sent to thousands of randomly-picked addresses or numbers in one go, many recipients will have never had PPI.

Earlier this month the Building Societies Association called for the CMCs' regulator - the Ministry of Justice - to be given stronger powers to address the problems, citing false claims as a key factor in slowing down genuine compensation claims.

MoneySavingExpert.com creator Martin Lewis says: "Claims companies operate in a wild west devoid of any effective regulation and with no redress for customers when things go wrong, barring taking them to court.   

"This has to end. We're also talking to the Ministry of Justice about toughening this up and trying to ensure real regulation. Yet for most people the golden rule is do not pay to reclaim.

"Do it yourself for free, then you can keep all of your cash."