Djanogly promises to ban CMC adverts promising cash

The Ministry of Justice (MoJ) has shut 260 claims management companies (CMCs) in the past year.

The figures come from the annual report of the MoJ’s Claims Management Regulation Unit, the CMC watchdog.

In the report, justice minister Jonathan Djanogly also promised to ban all CMC inducement advertising, such as adverts offering cash for claimants to sign up.

The report also showed that from April 2011 to March 2012 the MoJ authorised 612 new CMCs and that 539 authorised CMCs chose to shut.

Djanogly said: “Last year the CMR unit were able to investigate and take action against 409 poor practicing CMCs, of which 260 were shut down. This is a significant number and proves just how much work is going on to clamp down on CMCs that flout the rules and prey on consumers with over-zealous business tactics.”

Claims Management Regulation Unit head Kevin Rousell said the body had set up a team this year to catch CMCs using “poor practices” to present claims for mis-sold payment protection insurance.

He added: “There is more to do and the industry will be subjected to radical changes over the next 12 months with tougher policing by all the relevant regulators.”