Last year saw a tenfold increase in the number of claims management companies shut down by the Ministry of Justice, new figures show.
The MoJ has announced that it withdrew licenses from 349 claims firms in 2010/11 compared to 35 the year before. The number of businesses authorised to handle claims increased by 91, compared to 576 in 2009/10.
Those firms which had their licences taken away in 2010/11 were either found to be in breach of rules or failed to meet the regulator’s requirements for authorisation.
The worst misdemeanours prompting closure included evidence of fraud, misleading marketing and aggressive sales techniques.
MoJ claims management regulation unit head Kevin Rousell said: 'We have made it very clear to businesses that we are not going to accept any malpractice or attempts to take advantage of vulnerable people. There will be no let up in the coming year. Companies should remain in no doubt that if they breach the rules they will be closed down.”
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