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Firms queueing up to take on credit claims

The Ministry of Justice is receiving a staggering 150 applications a month from companies wishing to become claims management firms.

The MoJ is responsible for issuing claims management firms with their licences and has already authorised around 800 businesses to provide claims management services in the financial services sector.

It says since late summer 2008 it has seen a rise in the number of claims businesses offering to help consumers bring unenforceable consumer credit agreement claims.

Kevin Roussell, head of the claims management regulation department at the MoJ, says: “We have been concerned about this development – particularly where consumers are persuaded to rush to sign up to making a claim, and upfront fees are involved.”

Mal McConechy launched Liverpool-based Loan Resolutions last year and specialises in complaints relating to the Consumer Credit Act.

He says: “It does not surprise me that the MoJ is receiving that number of applications. In a few years’ time everyone will know somebody who has made a claim.”

He says a lot of firms have jumped on the bandwagon and think they can make a profit from claims management. He worries whether the MoJ will be able to cope with the demand.

“One of my concerns would be that if the MoJ is getting all these applications it will make it quite hard for it to police the sector.”

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Swaps had a mixed week. At the beginning of the week they surged before settling back slightly. Shorter-term money edged lower than the previous week whereas longer-term rates increased. Three-month LIBOR is now 1.81%.
1-year money is down 0.07% at 1.71%
2-year money is up 0.01% at 2.21%
3-year money is up 0.06% at 2.52%
5-year money is up 0.07% at 3%

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