Rogue claims management firms reined in by MoJ

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The Ministry of Justice increased pressure on the claims management sector last year resulting in the removal of more than 200 licences from firms flouting the rules.

The Claims Management Regulation Unit at the Ministry of Justice revoked the licences as part of wider action to clamp down on bad practice including bombarding the public with misleading advertisements and cold calling.

This latest round of action has taken the total of closed firms to more than 1,100 since regulation of the sector in 2007.

Justice Minister Shailesh Vara said: "With rigorous new measures being brought in across the board, we are taking strong action to rein in the rogue firms operating in this sector.

"Continued action to remove licenses from companies with poor practices alongside forthcoming Claims Management Regulation reforms proves just how much work is going on to get tough on companies that defy the rules and bombard the public with unwelcome calls and misleading information."

Government action has also seen the total number of CMCs drop by more than 1,000 since a peak of 3,367 in 2011 to 2,254 in November 2013.

The greatest fall in numbers has taken place in the personal injury claims sector which has seen the number of CMCs fall by more than 1,000 from a peak of 2,553 in December 2011 to around 1,400 in January 2014.

This comes as the government introduces a new set of toughened rules to crackdown on abuses. These include increased fees for CMCs and gives the unit new powers to fine firms for rule breaches, as well as employing more enforcement staff to tackle irresponsible practice.

 

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