MoJ crackdown on misleading firms
Around 100 claims management companies have been shut down by the Ministry of Justice (MoJ) as part of its efforts to stop firms that mislead the public.
According to the MoJ, the companies in question were making misleading claims that debts could be written off because they were unenforceable.
They were also found to be using high pressure sales techniques and cold-calling in person, as well as asking for large fees to pay for a service that did not live up to the marketing hype.
Other cases involved ignored requests for information from the regulator, persistently misleading marketing or being run by people who had convictions for fraud.
As a result the MoJ said it had cancelled the authorisation of 100 companies since April 2007, including personal injury firms.
Kevin Rousell, head of regulation at the Ministry of Justice, said: "The majority of claims management companies registered with the Ministry of Justice are operating within the rules.
"However, some companies choose to flout those rules and some also target consumers who find themselves in debt."
Regulations state that firms must not cold-call in person or engage in high pressure selling and that they must give written information on pursuing a claim.
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