Apfa has outlined a raft of new proposals to strengthen regulation of claims management companies as part of its response to a Ministry of Justice consultation.
The MoJ unveiled its plans for the CMC market in mid-February, and took responses to the reforms in a consultation that closed yesterday.
At the time, Apfa said the proposals would do little to address vexatious advice complaints, and now the trade body has released its own suggestions.
According to Apfa’s figures, the Financial Ombudsman Service received 2,707 complaints about financial advisers in 2015, with almost one-in-five brought by a CMC.
Of those complaints, only 22 per cent were successful. By contrast, 34 per cent of all complaints made in relation to advisers were upheld.
To address this, Apfa says while making a complaint to the FOS should remain free for consumers, CMCs should be required to pay a fee which can then be refunded if it is found to be legitimate.
In addition, it says a threshold should be set for spurious claims, with regulatory action linked to the rules.
The trade body also argues that many of its members receive poor quality information in claims, and calls on the MoJ to require CMCs to obtain confirmation from clients that all information provided in support of complaints is correct, and include this documentation.
The MoJ is currently analysing the feedback received through the consultation process, and is due to respond later this year.