New Conduct Rules for CMCs blasted - Insurance - News | moneyfacts.co.uk

News

Moneyfacts.co.uk News brings you the latest financial & economic news & reviews of the best products in the UK by our team of money experts.

New Conduct Rules for CMCs blasted

New Conduct Rules for CMCs blasted

Category: Insurance

Updated: 09/04/2013
First Published: 09/04/2013

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The Citizens Advice Bureau (CAB) has said new rules surrounding claims management companies (CMCs) are "extremely disappointing" and claimed they will do little to protect consumers from unscrupulous firms.

New Conduct Rules unveiled by the Ministry of Justice's (MoJ) Claims Management Regulation Unit stated that it had "made good progress in driving out most of the bad practices that were prevalent in the industry prior to regulation", but conceded that improvements were still required as the claims management sector grows.

No proposals were put forward by the MoJ to address rules surrounding CMCs cold-calling consumers, which drew heavy criticism from the service.

The CAB has called for tougher regulation of CMCs, which offer to claim back compensation for mis-sold payment protection insurance (PPI), including the banning of practices such as cold-calling and the charging of upfront fees.

The claims management industry has grown significantly over the past year as the extent of the PPI scandal became headline news. Nine out of ten consumers claimed they had been contacted by CMCs by telephone, email or text messages offering to claim back mis-sold PPI on their behalf.

Gillian Guy, chief executive of the Citizens Advice Bureau, said: "The new Conduct Rules are extremely disappointing. The regulator has let consumers down by not banning upfront fees, barring firms from cold calling or making sure fees are in proportion to the compensation gained.

"While it is good that the rules mean contracts will need to be signed in writing it does not go anywhere near tackling the real problems people are facing."

What next?

How to independently claim back mis-sold PPI
How to complain to a financial services provider

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

 
 
Close