The Claims Management Regulation (CMR) Unit at the Ministry of Justice (MoJ) will penalise claims firms using information gathered by unsolicited calls and texts, the Government announced yesterday.
The CMR Unit will be given a revised set of conduct rules to administer next week, backed by the use of fines and with an increase in staff to follow, and the Government has said the number of such claims companies has fallen from a peak of 3,400 in 2011 to 2,300 at present.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
The target will be those firms making unsubstantiated claims for compensation regarding the mis-selling of payment protection insurance (PPI). Since January 2011, 78% of PPI claims have been upheld by the Financial Ombudsman Service (FOS) with in excess of £10bn paid out in compensation.
Financial Secretary to the Treasury Sajid Javid estimated more than 1,100 companies currently focus on making claims over mis-sold financial products.
State of play
PPI complaints accounted for three-quarters of the caseload of the FOS for the year to the end of March. At the start of 2013 the Financial Services Authority, since subsumed by the Financial Conduct Authority (FCA), indicated a deadline for PPI complaints of April 2014 proposed by the British Bankers Association was unlikely.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataThe MoJ said in summer it would seek to improve regulation of claims management companies (CMCs), beginning with those pursuing personal injury claims. From March 2012 to June this year, the number of CMCs registered to claim for personal injury dropped from 2,435 to 1,700.
Last month the FCA reported total consumer financial services complaints were down by 15.05% year-on-year for H1 2013, with the sector in which PPI complaints are recorded down by 10.17% year-on-year.
richard.brown@timetric.com
