Claims management companies (CMCs) including PPI and other agencies will fall under the Financial Conduct Authority’s jurisdiction. The City watchdog plans to impose tougher rules for CMCs including huge penalties for cold calls and text messages.
According to banks, CMCs were the biggest contributor to its PPI administrative expenses. They collect names of would-be consumers and pass them onto a bank’s claiming system to see whether the individual was mis-sold PPI. It has added to the clogs in each respective claims system.
The FCA stated it would hold senior managers accountable for any failures to observe rules including those in CMCs. These managers will incur the full extent of penalties and any fines applicable.
Politicians blame the claims management industry as the biggest contributor to the UK’s rising “compensation culture,” which makes every citizens increasingly aware of their rights to demand compensation for even the smallest damages and personal injuries.
During the PPI scandal’s peak in 2012, CMCs have profited approximately £5 billion from the £22.2 billion collective PPI bill. They have increased their activities after the FCA announced the PPI claims deadline on 29 August 2019.
However, some consumers believe in reputable CMCs. The services had saved them time in reclaiming all the refunds and compensation due to them.