In its June newsletter to claims firms the MoJ, which regulates the sector, says it is in the process of issuing formal warnings to the worst offenders.
The newsletter defines a complaint as any expression of dissatisfaction, verbal or written, whether justified or not and insists all firms must have effective procedures in place to handle them.
It states: “It is apparent from the volume and nature of complaints that we are receiving that many businesses are failing to properly identify and/or handle complaints.
“We treat failures to comply with the Complaints Handling Rules 2006 seriously and are in the process of formally warning the worst offenders.
“Those who fail to implement changes to improve their complaints handling will be subject to further, formal enforcement action.”
The MoJ also highlighted an increase in claims firms targeting vulnerable customers and pledged firm action against businesses.
It also re-iterated its concern over the number of payment protection insurance mis-selling claims submitted where no policy had been sold.
It is currently auditing and investigating cases where businesses have unacceptably high level of ‘no PPI’ claims.