I’m sure like us, you’ll be happy to hear that the number of Claims Management Companies (CMC’s) trading is on its way down according to the latest data from the Financial Conduct Authority (FCA). The FCA took over responsibility for regulating Claims Management businesses back in 2018 and holds a register of all authorised companies. Their latest figures show that the number of CMC’s has reduced by 952 over the last 12 months, that’s a reduction in numbers of 29% – almost one third. Is this good news?
Well, I’m sure most people will be relieved to be receiving less unsolicited e mails and phone calls from CMC’s – these calls were banned two years ago now. The main reason for the number of CMC’s closing down though is the end of the PPI reclaims scheme. The majority of CMC’s were involved in this area of claim and now that you can no longer claim for PPI there is much less “claims” business available, especially of a simple nature like PPI.
CMC’s still operate in the personal injury market, but regulators cracked down on personal injury claims almost five years ago now, reducing the fees available to CMC’s and banning cold calling, all of which had the desired effect of reducing claims numbers. You can still access CMC’s to help with personal injury claims though and they can be helpful in some specialist areas like clinical negligence or industrial disease for example.
In the financial claims market CMC’s are now much less prevalent. You do still see advertising for claims about “bad” advice, but only from a handful of companies. Perhaps the reason for this is because there is a very small market for this type of claims – the Financial Ombudsman Service figures show that less than 0.5% of the claims they deal with are complaints about regulated financial advisers. That means that 99.5% of complaints are NOT about advisers! Sometimes when you read the financial press and look at some of the FCA’s statements you could be forgiven for thinking that this wasn’t the case.