The Ministry of Justice (MoJ) has unveiled new rules that are designed to offer customers who use the services of claims management companies (CMCs) better protection.
What the new rules will mean that CMCs will no longer be able to start acting for a claimant based upon the phone call alone and that they will now be required to acquire a signed contract from the claimant before they can proceed in taking any fees.
The changes were brought into force from Monday and include a host of other changes. Moving forward CMCs now must refer to their status as being regulated by the Claims Management Regulator Unit (CMRU) and not the Ministry of Justice to avoid misrepresentation as a government endorsement and they also must inform clients if they are suspended or they have received restrictions on their business within 14 days of the enforcement being taken.
These steps come as part of the MoJ‘s battle to bring down fraud within the claims industry as well as driving malpractice out of the industry in order to provide claimants protection when it comes to their money.
The Head of the Claims Management Regulation Unit, Kevin Rousell said: “We are making sure that people have time to think through any arrangement and are happy and clear about exactly what they are taking on before they agree anything, particularly before parting with any money.
“These new rules will root out poor practice and ensure consumers are better protected by making contract terms much clearer.”
The claims regulation have also made more information available to the public regarding firms who have been banned or received restrictions.
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