Crackdown should curb number of claims firms

The Association of Mortgage Intermediaries says it expects to see a decline in the number of mortgage-related claims management firms coming to market in the coming year.

Last week figures from Ministry of Justice revealed that it closed around one in five firms during the past year and almost doubled the number of MoJ staff responsible for regulating claims firms.

A freedom of information request by the Law Society Gazette found the MoJ cancelled the authorisation of 734 claims firms in the year to the end of March.

The closures reduced the total number of authorised claims firms to 3,018.

Robert Sinclair, director of AMI, says that the Financial Ombudsman Service is increasingly ruling against consumers and although a number of claims firms have dipped their toe in the water, many have been deterred.

He says: “I am hopeful the industry will now start to see a decline in the number of claims companies going after mortgage firms.

“Many firms have tested the water with complaints about mortgage firms, but FOS appears to be making some reasonable rational decisions about the complaints it receives. In many of the cases where it is ruling in consumers’ favour it is relating to a complaint about the advice given, not what was sold.”