Justice minister Bridget Prentice has warned that if claims management firms make false assertions in their advertising they could face enforcement action and even disqualification.
Unless companies can produce evidence to back up claims made in their adverts they risk breaching consumer protection regulations.
John Rattigan, head of compliance at claims management specialist Cartel Client Review, says: “The dubious practices of a minority of claims companies are putting the reputations of trust-worthy firms such as ours at risk.”
He says that some indebted consumers become confused and approach claims firms to try to get out of debt when they should be talking to debt management companies or the Citizens Advice Bureau.
Lee Lipson, legal services director at claims firm Credit Issues, echoes Rattigan’s views.
Lipson says: “This is a highly technical area of the legal system that requires specialist knowledge and expertise.”