“The matter is urgent as it is clear that the CMCs operating in the PPI sector are generating by far the most consumer complaints at 74% of the total,” said the mutual trade body.
“Worse still, the vast majority of these complaints are made against just 15 to 20 firms out of the 1,000 plus authorised in the financial services category. The BSA would like to know from the Ministry of Justice whether any of these few firms were amongst the 260 CMCs shut down in the last year. If not, why not?”
The names of CMCs with the worst consumer complaints records should be made public as soon as possible for the benefit of consumers, it said.
The BSA added that it will be lobbying with the MoJ in due course over releasing complaints data.
The BSA’s view has been backed by Richard Lloyd, executive director of consumer watchdog Which?.
Lloyd said: “What we also want to see is the government do more to clean up the CMC industry. We want a ban on upfront fees and cold calling, and for CMCs to be required to publish online all of their terms and conditions, fees and charges. Far too often consumers are being ripped off by unscrupulous CMCs, when they can easily reclaim the money by themselves for free.”
The Ministry Of Justice (MoJ) has announced it is handing over the responsibility of regulating CMCs to the Legal Ombudsman from next year. This means CMCs may have to pay compensation to customers they have mistreated under government proposals to bring them within the remit of the Legal Ombudsman.
At present, the MoJ regulates CMCs but cannot order them to compensate customers.
The BSA said this was a major step forward for consumers who have an issue with a CMC.