Over 350 Claims Companies shut down in the last 6 months

February 11, 2013

Charlotte PearceIn the last six months over 350 rip-off claim companies have been shut down, warned or suspended by the Ministry of Justice (MoJ) for targeting consumers who have no chance of a payout.


These rip-off claims management companies promise payouts for mis-sold payment protection, unfair bank charges and personal injury claims. Consumers are stung for upfront fees, leaving the consumer out of pocket when the payouts don’t materialise.

Tougher regulations are being brought in to reduce the risk to consumers for this type of service. These companies will need to enter into written contracts with their clients before taking any fees. A new independent consumer complaints service will be set up to address dissatisfied claims management customers, this will be provided by the Legal Ombudsman as of this year.

Justice Minister Helen Grant said: ‘We will not tolerate claims management companies that rip off consumers and flout the rules’. More than 900 claims management companies have been shut down in the past five years, the MoJ said.