The number of complaints about claims management companies increased by almost 40% in the last year, the Legal Ombudsman has said.
The complaints service had 23,000 consumer contacts in the first year of regulating CMCs and 32,000 in the past 12 months. To date, the ombudsman has accepted 4,683 complaints for investigation.
The two main areas of complaints received relate to delays and a failure to refund upfront fees as agreed: these accounted around half of all complaints.
Complaints about delays included failures to issue claims within a reasonable timeframe and failing to update clients on the progress of their claims.
Kathryn Stone OBE, chief ombudsman, said the service had made a difference to hundreds of people’s lives over the past two years.
The ombudsman service said it had made an impact on the wider claims management industry and adopts a ‘tough but fair’ approach when trends are identified in a CMC’s conduct.
In August 2016, it published information in the public interest about JAS Financial Advisory Services after numerous complaints were made about failure to progress claims and to keep consumers updated.
JAS has since closed and the ombudsman said it has helped 500 customers, some of whom were able to claim a refund.
The ombudsman starting accepting complaints about CMCs in January 2015 after intervention from the government in an effort to ‘clean up’ the industry.
The service was expecting to handle an extra 9,000 complaints every year, most of which relating to payment protection insurance.