The BSA says it has no confidence that errant firms will heed warnings from their regulator and calls for it to be given more powers to intervene.
BSA research shows bogus payment protection insurance claims rocketing 247% at building societies in the six months to April 2012, compared to the same period previously.
A whopping 57% of claims management firm claims were non-sale claims while it found an increase in pressure selling tactics targeted at elder;y and vulnerable customers.
Specifically the BSA wants the Ministry of Justice to be able to fine and strike off rogue firms and calls for a independent ombudsman to monitor complaints for the sector.
Adrian Coles, director-general of the BSA, says firms have clearly ignored warnings from the Ministry of Justice.
He says: “It is clear that the Ministry of Justice simply does not have the powers that it needs to effectively control the rogue elements in this industry. They do not even have the power to fine.
“Looked at from the perspective of our highly regulated sector some claims management companies look remarkably like the modern day equivalent of highwaymen.”