Claims Management Services:Written question - 167365

Q
Asked by Lee Rowley
(North East Derbyshire)
Asked on: 23 July 2018
Treasury
Claims Management Services
Commons
To ask the Chancellor of the Exchequer, whether (a) his Department or (b) the Financial Conduct Authority has made an assessment of trends in the level of costs for financial services as a result of (i) spurious and (ii) fraudulent claims by claims management companies.
A
Answered by: John Glen
Answered on: 10 September 2018

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.

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