A new online tool will allow anyone considering using a claims management company (CMC) to see which companies have breached regulation and exactly which rules they have broken, the Ministry of Justice has announced.
The tool can be accessed at www.justice.gov.uk/claims-regulation-enforcement, and will cover everything from minor warnings to suspensions and cancellations.
It will be updated on a regular basis, in order to help potential CMC customers decide what course of action to take and also to give them peace of mind that their complaints are being acted upon.
High number of CMC complaints
Last year, the Claims Management Regulator received over 10,000 complaints about CMCs, many of which were companies dealing with payment protection insurance (PPI) complaints. You can read more about PPI in our guide, Payment Protection Insurance explained.
The key reasons for these complaints were:
- Misleading marketing
- High-pressure selling
- Poor complaints systems
- Unclear fees
As a result of customer complaints, the regulator has already banned over 100 PPI CMCs and warned a further 149. The regulator is responsible for overseeing businesses which manage compensation claims for customers.
This tool is the latest in a series of crackdowns, which has included a ban on inducement advertising – so CMCs will no longer be able to use gift incentives to encourage consumers to use their services. This measure is intended to protect vulnerable customers.
Which? campaign against nuisance calls
Our campaign to call time on nuisance calls and texts includes cold calls from CMCs – you can read more about it here.
Which? executive director, Richard Lloyd, said: ‘Thousands of people tell us they are fed up with nuisance calls and texts from CMCs, which is why we are campaigning to call time on this distressing problem.
‘More information to help consumers avoid rogue claims management companies is welcome, but much tougher action is needed.’
For companies that break the rules, Which? wants to see:
- Hefty fines
- Licenses revoked
- Individuals banned from running CMCs
This summer will also see the implementation of tough new conduct rules, which include enforcement of written contracts rather than verbal contract arrangements.