Cross-party support among MPs is mounting for the regulation of claims management firms to be moved from the Ministry of Justice to the FCA.
All Party Parliamentary Group on financial services and insurance chair Jonathan Evans is leading a group of 10 MPs pushing the MoJ for change.
He says Justice Secretary Chris Grayling has ordered a departmental review to examine proposals for a change of regulator.
Evans says: “I believe claims management firms need a serious regulator. It is perfectly clear the MoJ does not have the capacity, expertise or resource to be able to properly regulate CMCs. The MoJ registers firms and deals with technical issues without proper conduct regulation. I believe it should be the FCA, it is the obvious organisation to be regulating CMCs.”
Conservative MP Heather Wheeler and Evans have held meetings with Grayling on the issue. Separately, Evans has flagged concerns with FCA director of supervision Clive Adamson.
Evans says: “Chris Grayling said he would arrange for someone to look at this issue within in the justice department. We will follow this up because it is clear there are a number of other parliamentarians who support our initiative.”
The use of claims firms has rocketed in the wake of the payment protection insurance misselling scandal. The FCA, the Financial Ombudsman Service, Which? and major banks have united in their criticism of claims firms encouraging complaints.
Association of Mortgage Intermediaries chief executive Robert Sinclair says: “We warmly support attempts to migrate the regualtion of financial services claims firms to the FCA. The MoJ suffers from a lack of resource but the FCA has the resource and ability to regulate properly.”