MoJ crackdown on claims management companies

August 12, 2009
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The Ministry of Justice has said that it “will not tolerate” high pressure selling and cold calling by claims management companies falsely claiming to be able to write off unenforceable debt.

The Claims Management Regulator has now cancelled the accreditation of 100 companies for failure to comply with the rules. These companies have variously ignored requests for information from the regulator, failed to disclose criminal convictions for fraud, disseminated persistently misleading marketing information and failed to pay regulation fees.

The Ministry of Justice’s Kevin Rousell, said:

‘The majority of claims management companies registered with the Ministry of Justice are operating within the rules.

However, some companies choose to flout those rules and some also target consumers who find themselves in debt. People desperate for a way out of their financial troubles can be vulnerable to the misleading marketing that the Ministry of Justice Claims Management Regulator is continuing to tackle.

People may have paid large up-front fees for a service that doesn’t live up to the marketing hype, and in the case of debt-related claims find themselves still liable to pay all their debts in full. There has also been a trend towards < high pressure cold calling from call centres, including making unsubstantiated claims and encouraging people into handing over fees there and then – a decision they regret later.

It is important that consumers make fully informed choices about whether to make a claim and whether to use the services of the company that has approached them. Consumers must be given clear information about the options available for pursuing their claim, realistic chances of success and the costs of doing so.

One hundred companies cancelled so far sends a strong message that if consumers aren’t treated fairly, there will be consequences for the companies. We will be continuing to step up the strong action needed to deal with those claims management companies found be disregarding the rules and the interests of the public.’

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