CMCs ‘have contacted 3 in 4 Britons’
Claims management companies have contacted three in four people suggesting they can get compensation, data from the Association of British Insurers has found.
According to the survey, 78 per cent of Britons have been contacted by a CMC asking if they had been involved in an accident or been mis-sold payment protection insurance. In London, the figure rose to 82 per cent.
Of the 2600 adults surveyed, 92 per cent of those who received such a message from a CMC said it was not relevant to them.
James Dalton, head of liability for the ABI, said: “Unsolicited contact from claims management firms is a symptom of our dysfunctional compensation system, which encourages frivolous, exaggerated and even invented claims. The real losers are honest policyholders who end up paying the price through higher insurance premiums.”
This comes as Alan Lakey, partner for Hertfordshire-based Highclere Financial Services, and Derek Bradley, founder of the PanaceaIFA website, discussed the problem of CMCs at the Ministry of Justice’s claims management regulation unit on 20 June.
Mr Bradley said: “Recently we highlighted concerns over the seemingly unchecked proliferation of CMCs. The financial services industry is going through one of the most radical overhauls ever seen, yet while all this is going on, the more ‘Wild West’ the legal system is becoming, and one must question whether the MoJ is turning into a town that is out of control with no sheriff.”
Mr Bradley said a recent freedom of information request had shown that the MoJ has shut down 734 CMCs in the year to the end of March.