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Apfa chair writes to Chris Grayling demanding bogus claims crackdown

Apfa 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.

Chris Hannant 480
Apfa policy director Chris Hannant

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. He notes 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.

The trade body has called on the MoJ to introduce higher standards of approval for claims, equal to the standards set for FSA-regulated businesses. Apfa says this should include scrutiny of business plans and checks on the individuals running claims firms.

It also wants to see a doubling of the number of staff devoted to supervising claims firms, paid for by increasing CMC’s regulatory 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.”

Hannant says unsolicited marketing calls and texts need to be tackled as they are often the starting point for generating fraudulent claims. The Information Commissioner has had 60,000 reports about unwanted calls and texts since March 2012.

He adds: “Fraud should be treated as the crime it is. The MoJ needs to take tougher action. Advisers should report any bogus or fraudulent claims straight to the MoJ. We are also asking they let us know so we can collect evidence of wrongdoing to keep the pressure on.”

Apfa has set up a reporting form on its website for advisers to notify the MoJ of fraudulent claims. Advisers can also report fraudulent complaints directly to the MoJ’s Claims Regulation Unit via

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.



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