HM Treasury and the Financial Conduct Authority (FCA) do not make assessments of the level of costs for financial services as a result of spurious and fraudulent claims by claims management companies (CMCs).
In 2015 the government commissioned an independent review which found that there was still widespread evidence of detriment caused by CMCs. The FCA’s research found that some CMCs used ‘heavy and persuasive marketing tactics’ and offered poor value for money to consumers, despite regulation by the Claims Management Regulator (CMR) under the Ministry of Justice.
The Financial Guidance and Claims Act strengthens the regulation of CMCs by transferring regulatory responsibility from the CMR to the FCA. The FCA will regulate most claims management activity from the 1 April 2019 and will continue to monitor the activities of CMCs and its impact on the sectors they are active in.