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Claims Management Services

Ministry of Justice written question – answered on 28th November 2014.

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Photo of David Ward David Ward Liberal Democrat, Bradford East

To ask the Secretary of State for Justice, if he will take steps to more effectively regulate claims management companies.

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

A number of reforms have or are being made to strengthen the effectiveness of regulation of claims management companies (CMCs). These include a ban on CMCs offering financial rewards or similar benefits to potential claimants as an inducement to make a claim; the publication of CMCs under investigation and subject to enforcement action; key changes to the conduct rules to ensure that claims are substantiated before being pursued and any data received through telemarketing is legally obtained; the appointment of the first two independent non-executive board members to the executive-led Claims Management Regulation Board to provide a greater element of external challenge; expanding the Regulator’s enforcement tools with a new power to impose financial penalties for conduct breaches; and bringing consumer complaints against CMCs within the remit of the Legal Ombudsman. The Government is committed to improving the ability to root out and punish bad practices by CMCs, better protect the consumers who use their services or are subjected to their marketing practices; and to help organisations that are on the receiving end of high volumes of unsubstantiated claims.

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