The compensation cowboys making life miserable for consumers
We need stronger deterrents for dodgy claims manager companies, say insurers
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Your support makes all the difference.It’s time to clamp down on compensation cowboys, reckons the Association of British Insurers. It’s called for tougher regulation to protect us from rogue claims management companies that plague people with nuisance calls, charge high fees and push up the cost of insurance for honest customers.
“No one should be pressured into making a compensation claim,” said Rob Cummings of the ABI. “For too long some claims management companies have helped fuel a compensation culture through nuisance calls, misleading adverts and high charges.”
The ABI wants regulatory responsibility of claims firms to be transferred from the Claims Management Regulator to a tougher regime under the FCA, "since the current system is failing to provide enough of a deterrent to rogue firms".
The Association points out that the continuing high levels of cold-calling is still disturbing the public. Its recent research found 83 per cent of people have been contacted by a claims manager encouraging them to claim compensation, for personal injury or other financial loss. 92 per cent said that the contact had no relevance to them.
Underlining the menace of the dodgy claims firms is the fact that so far this year the Information Commissioner's Office has received almost 49,000 calls about nuisance communications relating to accident and PPI claims.
The ABI also warned of the potential involvement of claims managers in fraud. The Insurance Fraud Bureau currently has 56 firms under investigation as part of staged crash-for-cash motor accident scams.
“The continuing high levels of nuisance calls and speculative claims some CMCs are responsible for demonstrate the urgent need for a regulatory regime which is fit-for-purpose," said Mr Cummings. "Tougher supervision should drive the cowboy operators out of town and ensure that honest customer do not end up footing the bill for the rogue firms.”
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