Ministry of Justice Crackdown on Rogue Claims Firms


As the Ministry of Justice last week announced a major crackdown on the claims management industry, We Fight Any Claim has welcomed the news that 200 rogue claims firms were closed down by the regulatory body during the last year.

As part of an industry clean-up, the Ministry of Justice revoked 200 licenses of claims firms during 2013. The total number of claims management companies in existence is down by more than one thousand since its industry peak of 3,367 in 2011, to 2,254 firms in November 2013.

Justice Minister Shailesh Vara said:

“Continued action to remove licenses from companies with poor practices alongside forthcoming Claims Management Regulation reforms, proves just how much work is going on to get tough on companies that defy the rules and bombard the public with unwelcome calls and misleading information.”

Since it started regulating the industry in 2007, the MoJ has introduced rigorous rules and actively clamped down on bad practices including cold calling, misleading advertising and the banning of verbal contract agreements, resulting in the closure or suspension of those companies practicing outside of the rules set in place by the regulatory body.

The MoJ’s Claims Management Regulation Unit, controls businesses handling personal injury compensation, financial service claims such as Payment Protection Insurance claims and employment matters amongst others.  

Head of Communications here at We Fight Any Claim, Simon Evans added:

"As a Claims Management Company working within the rules and guidelines set by the Ministry of Justice, we welcome the news that 200 rogue firms have been closed down as a result of the regulatory body’s rigorous protocols.   

“We strive to distinguish our services far above those companies who bring a bad name to the claims management industry and work hard to meet the expectations of our customers by offering a clear and transparent service, on a no-win no-fee basis.

“As the MoJ continues to crack down on unscrupulous claims firms, we hope that consumers will persevere, and not be deterred by those companies breaking regulations, in fighting to reclaim what is rightfully theirs, whether that is via the specialist services of a legitimate claims firm such as We Fight Any Claim, or independently”    


Banks Cease Talks on PPI Deadline

Banks have ceased talks on agreeing a Payment Protection Insurance (PPI) deadline with regulatory body the Financial Conduct Authority (FCA), after it was reported this month that the industry was once again lobbying for a cut-off date for claims.

It was reported that banks were pushing for a PPI deadline which would be implemented after an advertising campaign over the mis-selling scandal to raise awareness and maximise customer refunds.

The FCA said that they would not rule out the possibility of a deadline, however would only approve the plans if banks could guarantee quick refunds for all legitimate claims, described by FCA chairman, John Griffiths-Jones as a “high hurdle”.

According to reports from Sky News, banks have now terminated discussions over the potential cut-off date, which would put an end to future claims and compensation. This means that the PPI scandal and pay outs are anticipated to last for many years to come as banks continue to set aside billions of pounds for those people who were mis-led into paying their bank or lender for the insurance product.

In January this year Lloyds banking group set aside a further £1.8 billion to compensate victims of the mis-selling scandal, taking the total amount set aside by the ‘big four’ banks to just under £20 billion. 

Meanwhile, Chief executive at Lloyds, Antonio Horta-Osorio is set to receive a bonus worth £1.7 million. The bank’s overall bonus pool went up from £365 million last year to £395 million this year, despite the bank cutting 35,000 jobs following its government bailout. Commenting on the news, Unite national officer Rob Macgregor said:

“The chief executive’s £1.7 million bonus, on top of shares worth millions awarded at the end of October is a kick in the teeth to the taxpayer.”

Horta-Osorio has hit back at critics, defending his personal bonus and a £30 million boost to the Lloyds bonus pool, arguing that the bonuses link directly to the performance of staff and the bank:

 "I strongly believe you should link compensation with performance, and having increased our underlying profits by 140%, we thought it was appropriate to increase the bonus pool of the bank by 8%.

Hard work at any company or business should of course be rewarded, but it comes as no surprise that the scale of bonus planned for the chief executive of Lloyds has been met with scrutiny.

Antony Jenkins, CEO of Barclays bank, for instance has waived his bonus believed to be worth up to £2.75 million, stating that accepting the bonus “would not be right” due to costs incurred by the bank. Perhaps the principle of surrendering a substantial bonus is worth considering for the chief executive of Lloyds and many other banks whose customers continue to wait for resolutions on an unprecedented number of outstanding PPI complaints

Banks Push for PPI Deadline

With Lloyds Banking Group this month announcing they are to put aside additional PPI provisions, it seems that the PPI scandal is set to stick around for some time yet.

However, despite the total PPI bill across all banks reaching £20 billion, there are rumours surrounding a revived proposal for a ‘PPI deadline’ which would potentially put an end to future complaints and customer compensation.

Lloyds bank last week announced that they are to add a further £1.8 billion to their already substantial PPI pot which has now reached just under £10 billion, the biggest sum of money set aside by any UK bank.

The total £20 billion reserved for customers who were mis-sold PPI by their bank, is in fact far bigger than the total bill for both mis-leading pension sales and mortgage endowments, which currently stand at £11.8 billion and £2.7 billion respectively.

And yet, news reports suggest that British banks are once again in talks with industry regulator, the Financial Conduct Authority (FCA) over a proposed deadline for mis-sold PPI claims. The FCA have refused to rule out setting a deadline, however Martin Wheatley, chief executive of the industry watchdog has said that “significant benefits” would have to be presented by banks for the FCA to consider the deadline:

“We are having a discussion and we have had that discussion many times over three years. Our question is: would there be significant consumer benefit to taking away consumer rights? It’s an equation.”

Meanwhile, as Natalie Ceeney, ex-chief ombudsman at the Financial Ombudsman Service (FOS) steps into her controversial new role at banking giant, HSBC, the FOS continues to receive exceptional volumes of PPI complaints. The impartial ombudsman service, where consumers can take grievances which remain unresolved, anticipate to welcome the new financial year with more than 400,000 unsettled complaints.

While PPI complaints are now beginning to decline, the figures remain vast. Between April and December last year, 326,977 new cases were taken on by the FOS, with around 6,000 complaints every week during the last quarter of 2013. 

A PPI deadline may be the recommended solution from the banking industry, which in their opinion will help to draw a line under the scandal which has cost the industry billions in redress, and in fact encourage customers to make legitimate complaints through a raised awareness campaign.

However, from the consumer perspective let’s consider the fact that more than 400,000 complaints are likely remain unresolved at the FOS this April, not to mention, the colossal PPI bill, which continues to rise beyond original expectations as a result of banks’ submissions. The evidence implies that there is still much work to be done before banks can be absolutely certain that all those who were mis-led into paying thousands of pounds for useless or unwanted PPI, will receive what they rightly deserve before a ‘set in stone’ cut-off date.