Aifa has called for claims management firms to be regulated by the Financial Conduct Authority.
In August, the Ministry of Justice published a consultation paper which proposed new rules for CMCs that will require them to obtain signed contracts from consumers and force them to provide “unambiguous” information about relevant ombudsman schemes.
In its response to the paper, published today, Aifa policy director Chris Hannant says: “The real problem within the claims management industry is not that the rules are wrong, it is the lack of enforcement. The current regime is under resourced and ineffective. For example, banned companies can often reappear in another guise shortly after being banned.
“However, in the interests of consumer protection, we must ensure that sufficient resources and expertise is applied in this area. This means transferring regulation of CMCs to the new regulator, the Financial Conduct Authority.”
In July, Conservative Lord Flight, Labour Treasury spokesman in the Lords Lord Eatwell and Labour peer Baroness Hayter tabled an amendment to the Financial Services Bill proposing that claims firms are regulated by the FCA from next year.