Friday, 8 February 2013

Crackdown on 250 PPI claim firms

The Ministry of Justice says it has shut down or warned 252 claims companies dealing with compensation for Payment Protection Insurance mis-selling in the past year.

 A specialist team created to crackdown on bad practice has banned 103 PPI firms from business and warned 149 for poor practices.

The the main causes for consumer concern were: misleading marketing, high-pressure selling, poor complaints systems and unclear fees.

The firms contact PPI victims using texts, phone calls and advertising in newspapers and online. They encourage people to claims and then take 30% of any compensation as a fee.

The majority of complaints the Ministry receives about claims management companies are related to PPI  – 2,405 between 2011-12.

In a drive to further improve the industry, the team will be revisiting the companies who have received official warnings - those that haven’t addressed poor practice will face being banned from business. 

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