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MoJ launches crackdown on PPI claims chasers

MoJ Ministry of Justice 480

The Ministry of Justice is cracking down on unscrupulous claim firms targeting payment protection insurance misselling claims.

The department has set up a specialist unit to investigate PPI misselling claim firms and agreed memorandums of understanding with the FSA, the Financial Services Compensation Scheme and the Financial Ombudsman Service to share information and work more closely.

It has also developed a reporting template for use by credit card companies, banks and building societies to facilitate the exchange of information about businesses’ activities.

In its claims management regulation annual report for 2011/12, the MoJ says it made 150 audits and visits to firms and 409 have been warned, suspended or had their authorisation cancelled.

MoJ head of claims management Kevin Roussell says: “The mass misselling of PPI has seen a surge in the number of companies operating in the financial claims management sector. Poor practice is rife among some claims management companies that are falling over each other to get claimants’ business.”

The number of claim firms targeting financial services grew from 946 in March 2011 to 975 in March this year.

The MoJ is also warning that claim firms are targeting mortgages, unenforceable consumer credit agreements and missold investments as they seek to exploit new areas.

The MoJ received 8,521 consumer complaints relating to financial services claim firms in the year to March, which accounted for 93 per cent of all complaints, despite only making up 17 per cent of firms.

It has also received more than 1,000 complaints from financial services companies about claim management firms.

Your Mortgage Decisions director Dominik Lipnicki says the crackdown does not go far enough.

He says: “The MoJ must make claim companies pay the £500 FOS fee if claims are unsuccessful. Everything else is a bit of a gimmick.”


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  1. It might help if the MoJ were to wake up to and take action against the widespread practice of CMC’s side-stepping its prohibition on cold calling by contracting it out to unregulated third party “marketing” companies.

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