New figures, from the Ministry of Justice, show that hundreds of rogue claims management companies were closed down, or warned about their practices, during 2012.
The claims management industry has grown significantly over recent years; as have concerns about many of their practices, which often include unlawful and unsolicited use of text messages and emails to generate new enquiries.
The industry is regulated by the Ministry of Justice, whose Claims Management Regulation Unit has shut down 209 firms between April and November 2012, with a further 140 warned about their practices. The total number of claims management companies closed down over the past five years now exceeds 900.
It would also appear that action is being taken to clamp down on firms who break data protection laws with unsolicited text messages, cold calls and emails.
PPI mis-selling
Much of the growth in the claims management industry has been down to the PPI (Payment Protection Insurance) mis-selling scandal, which has seen the UK’s banks pay billions of pounds in compensation to people who were unlawfully sold the insurance.
Claims management companies have submitted thousands of the PPI mis-selling claims, despite the fact that experts, including the high profile Martin Lewis of MoneySavingExpert fame, have been warning of the high fees charged by such companies, and urging people to submit claims themselves.
Experts believe that claimants often use claims management companies because they mistakenly believe that the claims process is complex, or they will stand a better chance of being successful if they use such a firm. In reality the process of making a complaint is relatively simple, with a huge number of resources available for free online to help potential claimants.
The MoneySavingExpert website contains a wealth of information and guides showing you how to make a PPI mis-selling claim, visit it by clicking here.
