A CRACKDOWN is being planned on claims management firms which promise to get consumers’ debts written off.
Talks on the issue have been held by the Ministry of Justice and the City watchdog at the Financial Services Authority’s headquarters, attended by the Solicitors Regulation Authority and the police.
There have been growing concerns about claims management firms which advertise that they can get unsecured debts written off, because the credit agreements are unenforcable, as they fail to comply with the Consumer Credit Act.
The claims have been flooding the county courts and it was recently estimated that there are about 100,000 such cases waiting to be heard.
The firms are understood to charge fees of up to £1,500 for each agreement they look at, but the fees are not refundable even if the firm fails, leaving consumers in a worse position than when they started.
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