Labour peer Lord Kennedy says he will ask “fundamental questions” about the regulation of claim management companies when he meets with justice minister Lord McNally and consumer groups on April 24.
Lord McNally agreed to the meeting in response to a question from Kennedy in the House of Lords last month.
McNally told the House of Lords he accepted the Government must do more to crack down on “dodgy practices” used by CMCs and suggested there may be “a better home” for the regulation of CMCs than the Ministry of Justice.
Financial Ombudsman Service board member and fellow Labour peer Baroness Maeve Sherlock will also attend.
Speaking to Money Marketing, Kennedy says: “I will be asking fundamental questions about whether it is right the MoJ regulates these firms. The Department for Business Innovation and Skills usually covers this kind of thing and it may be they can do a better job.
“CMCs can be very aggressive, some are ripping people off and hoovering up complaints like they do can lead to spurious claims and that is a waste of everyone’s time.”
Financial Services Compensation Scheme figures for 2011, published in January, show that 75 per cent of payment protection insurance claims were brought by CMCs.
Rowley Turton director Scott Gallacher says: “The Financial Ombudsman Service makes the complaint process simple and, apart from filling in a few forms, I cannot see what value CMCs add.”
Which? executive director Richard Lloyd says: “CMCs must clean up their act.”