The MoJ, which started regulating claims management companies in 2007, has cancelled firms’ authorisations for failure to comply with the claims regulation conduct rules.
MoJ head of regulation Kevin Rousell notes a trend towards high-pressure cold-calling, including misleading and unsubstantiated claims and encouraging consumers to pay on-the-spot fees. He says that in the case of debt-related claims, many clients find themselves still liable to pay all their debts in full.
Rousell says: “Most claims management companies registered with the Ministry of Justice operate within the rules. However, some firms choose to flout those rules and also target consumers in debt. People desperate for a way out of their financial troubles can be vulnerable to the misleading mar- keting that the Ministry of Justice Claims Management Regulator is continuing to tackle.”
Association of Mortgage Intermediaries director Robert Sinclair says claims management companies should be charged case fees if they are found to be bringing vexatious claims to the Financial Ombudsman Service.
He says: “This would ensure we continue to deliver an industry that serves consumers well, without the payment of up-front fees, which we currently have with the ombudsman service.”