CMRU: packaged bank account claims a concern
The number of personal injury claims management companies (CMCs) has fallen below 1,000, it has emerged.
From 2,300 at the start of 2013, the number of CMCs dropped dramatically to only 979 by the end of March this year, according to the latest figures from the Claims Management Regulation Unit (CMRU).
In its annual report last summer, the CMRU, based at the Ministry of Justice (MoJ), said smaller CMCs in particular had been hit hard by ban on personal injury referral fees, introduced on 1 April 2013, the Jackson reforms, the cuts in portal fees and ban on inducements.
At the end of last year, the CMRU gained the power to impose potentially huge fines on companies which break the rules and in February the MoJ announced big increases in regulation fees.
In an update on enforcement actions during the first three months of 2015 published last week, the CMRU said it had audited 77 companies, bringing 59 of them to compliance, and issued three warnings.
The unit said that since the referral fee ban came into effect, it had visited 946 personal injury CMCs, and continued to work closely with the Solicitors Regulation Authority and Financial Conduct Authority.
On PPI, the CMRU said it had warned 39 CMCs for a “range of serious issues in relation to complaint handling, marketing activities and submitting inadequately completed PPI consumer questionnaires to the Financial Ombudsman Service”.
The unit said it had cancelled the authorisation of one CMC during the first three months of this year and a further five were currently under investigation. The CMRU said it had audited 40 CMCs.
“Some CMCs received warnings following the audit findings. CMCs are assessed and selected for audits based on the intelligence we receive and the risk they pose.
“We have ongoing concerns about the activities of some CMCs specialising in packaged bank account claims and are monitoring this market closely as part of our programme of audits and visits.
“Some CMCs have been presenting poorly prepared claims to banks and others have been seeking to prevent banks from communicating directly with their customers.”
The CMRU added that it had shared intelligence with HM Revenue and Customs on CMCs involved in tax evasion, as a result of which HMRC had launched investigations.
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