Cross-party support among MPs is mounting for the regulation of claims management firms to be moved from the Ministry of Justice to the FCA.
All Party Parliamentary Group on financial services and insurance chair Jonathan Evans is leading a group of 10 MPs pushing the MoJ for change.
He says Justice Secretary Chris Grayling has ordered a departmental review to examine proposals for a change of regulator.
Evans says: “I believe claims management firms need a serious regulator. It is perfectly clear the MoJ does not have the capacity, expertise or resource to be able to properly regulate CMCs. The MoJ register firms and deals with technical issues on details without proper conduct regulation. I believe it should be the FCA, it is the obvious place.”
Conservative MP Heather Wheeler and Evans have held meetings with Grayling and FCA director of supervision Clive Adamson over the proposal.
Evans says: “Chris Grayling said he would arrange for someone to look at it in the department and I anticipate someone is now considering it. We will follow it up because it was clear there are a number of other parliamentarians who support our initiative and want to join what we said.”
The use of financial claims firms has rocketed since the payment protection insurance misselling scandal exploded in 2011.
Debt charity Debt Support Trust director Stuart Carmichael says he backs calls for the FCA to take over the regulation of claims firms as it is a more strict regulator than the MoJ.
He says: “I think the FCA’s policies are possibly the strictest and most direct of all the regulators out there now. And that can only be a good thing for consumers. The barriers to entry with the MoJ are low so it would be good for a tighter regime to monitor them.”