Claims-handling Companies

Oral Answers to Questions — Justice – in the House of Commons at 11:30 am on 17th March 2015.

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Photo of John Mann John Mann Labour, Bassetlaw 11:30 am, 17th March 2015

What assessment he has made of the effectiveness of his Department's oversight of claims-handling companies.

Photo of Shailesh Vara Shailesh Vara The Parliamentary Under-Secretary of State for Justice

Tackling bad practices by claims management companies is a priority for the Department’s claims management regulator. Recent measures taken to strengthen the effectiveness regulation include tougher rules to crack down on malpractice and a new power to impose financial penalties on CMCs that break the rules. Since regulation began in 2007, the licences of more than 1,200 CMCs have been removed. Between April and December 2014, we stepped up enforcement action, with 338 CMCs being warned for poor conduct or having their licences removed.

Photo of John Mann John Mann Labour, Bassetlaw

The whole country is sick of these companies ringing up day and night leaving answerphone messages and harassing pensioners. When it comes to PPI mis-selling, they are taking half the money that is due to decent people purely for writing a letter to a bank asking it to investigate the matter. We need to expose the sham of these companies more effectively, because, across the country, people are losing out and are getting increasingly sick of their behaviour.

Photo of Shailesh Vara Shailesh Vara The Parliamentary Under-Secretary of State for Justice

I agree that many people are very upset with the behaviour of those companies. In fact, millions of people are upset with what is happening. This is something that requires joined-up activity. The claims management regulator is working closely with the primary enforcement agencies at the Information Commissioner’s office and at Ofcom to investigate practices and take firm enforcement action against rogue companies. The hon. Gentleman will be aware that much work on nuisance calls has already been done and that the Department for Culture, Media and Sport is leading on reforms in this area. Last year, for example, the Department published a joint action plan, involving all the relevant regulators, including the Information Commissioner’s office, Ofcom and the claims management regulator.