Response to Government’s new rules on CMCs

The Ministry of Justice has today announced new rules for claims management companies (CMCs). In response,

Which? executive director, Richard Lloyd said:

“The claims management industry is riddled with bad practice and unscrupulous businesses with little regard for their customers. Payment protection insurance claims have fuelled an explosive growth in the industry, with thousands of people fleeced by CMCs charging hefty fees for simple complaints that consumers can easily do for themselves for free.

“That’s why, although these new rules are a step in the right direction, we think the Government should be much bolder in cleaning up the claims industry. Upfront fees should be banned and those in charge of claims firms properly held to account for bad behaviour, with hefty fines imposed, licences revoked and individuals barred from running CMCs if they’re found guilty of breaking the rules.

“Thousands of people are telling us that they are totally fed up with nuisance calls and texts from CMCs.  On their behalf we’re campaigning for regulators, including the Claims Management Regulator, to crack down on those responsible and call time on this major nuisance, so it’s disappointing that the Government has missed this opportunity to respond.

“Ministers must rethink this piecemeal approach to regulating CMCs and take tougher, joined-up action to protect consumers.”