Over 100 Claims Management Companies (CMC) have been banned from business in the last year while many more have been warned about heir conduct after the Ministry of Justice discovered widespread bad work practices within the industry.
The Ministry’s Claims Management Unit’s PPI Compliance team, which was set up in November 2011 following a flood of complaints from the general public, have produced a damning report into the conduct of many CMCs.
The report claimed some CMCS had “failed to establish if the consumer had PPI or was actually a client of the financial institution” and encouraged clients to complain “without due cause.”
The Unit believed many CMCs failed to obtain enough information from the client and based many claims on standard information where the client was “unsure” whether they had PPI on their loan, mortgage or credit card.
“The mass mis-selling of PPI has seen complaints against claims management companies soar,” revealed Kevin Roussel, the head of claims management regulation at the Ministry. “As this report shows, we won’t tolerate firms that break the rules and we have shut down or warned more than 252 companies dealing with PPI claims in the past year.
“As part of our continued crackdown we are expanding our compliance work to ensure even more rogue companies clean up their acts or face closure. We would advise consumers to consider whether they need to use a claims management company to make their claim. Companies can help them – but they may well be able to make the claim on their own.”
The MoJ have confirmed there are currently around 1,100 authorised CMCs operating in the PPI market, which account for the “vast majority of consumer and non-consumer complaints” received.
An alternative to processing your PPI claim through a claims management company is to go directly to a solicitor, who offer expert legal advice and will process it without the need for referral fees.
At PPI Refund, we have years of experience at processing PPI claims and offer a free first consultation to establish the facts of your case. Call 0800 862 0571 to book an appointment.