MoJ beefs up PPI claims regulation, as banks fear 50% of PPI claims might be Speculative

By: Nik Jones

Figures release under the Freedom of Information Act have revealed that the Ministry of Justice (MoJ) has closed down around one-fifth of claims management companies handling PPI compensation claims because of poor practices.

The MoJ oversees claims management companies and how they operate - reputable companies will process a PPI refund on a No win No fee basis and charge a percentage of the final settlement for costs at the end of the negotiations, once an agreement with the bank or financial institution has been reached and the PPI refund monies have been forwarded.

Information obtained from the MoJís Claims Management Regulation Department showed that 734 claims management companies handling PPI compensation cases were closed by the MoJ in the 12 months up to March 2012.

A total of 9,570 complaints by consumers trying to reclaim PPI had been received by the Claims Management Regulation Department and these partly led to the closures.

The MoJ said that record numbers of staff were being assigned to regulate claims management companies handing PPI compensation.

However, executive member of trade association the Claims Standards Council, Anthony Sultan, has said that the closures do not mean that consumers should be worried about a culture of mishandling PPI compensation claims - and implied that closures might actually be good for the PPI refund sector:

"A lot of companies have decided it is not for them and they donít want to be in claims," said Mr Sultan.

"It's very important for those heavily involved in the industry that the highest standards prevail and anyone who fails to meet them is exited from the sector."

Mr Sultan said that "rogue traders" operated in every profession and it was the duty of the trade body to act quickly to deal with the issue.

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PPI Refund 4 Me is a trading name of UKMS Money Solutions Limited regulated by the Ministry of Justice in respect of regulated claims management activities. CRM26720

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