New curbs proposed on claims management companies
Thursday 19th July 2012
Claims management companies would not have their claims even looked at and could face fines if they fail to supply adequate information, under an amendment to the Financial Services Bill.
Tabled by Labour peer Lord Kennedy, the amendment calls for an independent ‘supervisor of claims’ to be established.
This would check that claims management companies had submitted enough information for the complaint to be valid.
Anyone charging a fee to represent a complainant would have to disclose details of the agreement with that person, and supply adequate information.
If they failed to do so, the supervisor would refuse to consider the complaint or impose a fine.
The Ministry of Justice currently only investigates willful malpractice by CMCs, and Kennedy’s proposed amendment is to toughen up the regime.
Kennedy said that CMCs must be properly regulated and the amendment is intended to put pressure on the Ministry of Justice to introduce new rules.
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