A Lancashire claims manager has been stripped of its licence after encouraging holiday-goers to fabricate or embellish symptoms of gastric illness to get compensation, the Ministry of Justice announced today.

The ministry said the action against Allsure Ltd, based in Preston, is the latest in a 'series of moves' by the government to crack down on fake sickness claims.

Today's announcement states that the Claims Management Regulator identified 'potential systematic failings' in Allsure Ltd's sales scripts and call recordings during an audit.

The regulator, based at the ministry, regulates companies that offer to help people claim compensation for issues such as personal injury and mis-sold financial products.

Following an investigation, Allsure Ltd was 'found to have breached conduct rules' when making marketing calls for holiday sickness claims by: making false or unsubstantiated claims; misleading statements about the amounts due to consumers; and trying to coach consumers to provide the answers needed to meet the criteria for making a claim.

Allsure Ltd, which has been operating in the PI claims sector since 2014, can no longer offer regulated claims management services to new or existing clients.

Kevin Rousell, head of the regulator, said: 'We will take firm action against claims businesses which engage in serious misconduct. Seeking to encourage false claims will not be tolerated.'

Allsure Ltd can appeal the cancellation and has 28 days to make representations to the first-tier tribunal.

In July the government announced plans to change costs rules to clamp down on the growing market in holiday sickness claims.

David Lidington, justice secretary, said tour operators defending the claims will pay a fixed sum depending on the value of the claim, making their costs predictable and reducing incentives to bring exaggerated claims.