The Association of Professional Financial Advisers has written to the justice secretary Chris Grayling to urge the Ministry of Justice to suspend or ban claims management companies that submit bogus claims.
In his letter to Grayling, Apfa chairman Lord Deben says there is an increasing number of claims being submitted by CMCs where no policy ever existed or where there is no evidence of misselling, noting the Financial Ombudsman Service dismissed more than 5,000 payment protection insurance complaints because no policy was sold.
Apfa says the MoJ needs to act quicker when claims from CMCs are found to be fraudulent by suspending or removing a CMC’s authorisation, to introduce higher standards for CMCs and to double the number of MoJ staff that deal with CMCs, paid for by increasing their fees.
Apfa policy director Chris Hannant says: “We are seeing more and more examples of claims being submitted by CMCs where there was no product or where there is no evidence of any misselling. This is fraud. We are also concerned the methods being used to obtain new business have become increasingly intrusive.”
The trade body is also recommending advisers encourage clients, friends and family to report unwanted marketing messages from claims firms to the Information Commissioners Office.