The Ministry of Justice (MoJ) recently announced it is looking to target Claims Management Companies (CMCs) due to their persistent harassment of advisers.
Panacea CEO Derek Bradley said that the MoJ, which regulates the claims industry, had been unaware of the “serious and unintended” impact of these firms on the IFA sector but was eager to rectify the situation.
However, our poll found that 64% of brokers think the MoJ will fail in its bid to clamp down on such behaviour. Just 24% of respondents said they thought the MoJ had sufficient regulatory teeth to make a difference.
Roger Snodin of RS Mortgages told Mortgage Solutions: “It’s a major problem for brokers. I’ve had a case that was fraudulent and bogus where they had written up a complete pack of lies.
“I know of many colleagues in the industry have suffered similar claims and it is especially tough for smaller firms and single brokers who don’t have the resources to fight back.
“It’s this kind of activity that is crippling business and I’m certain that some companies have packed up and left the industry because of it.
“I have made complaints to the MoJ, FSA and my local MP and was left very frustrated at the response from the FSA. The FSA has been left flat-footed by these scammers.
“I don’t think the MoJ will do anything because they haven’t got the power and they’re just civil servants who won’t be able to stop these fraudulent claims.”
