People who get poor service from claims management companies will soon be able to go to the Legal Ombudsman for financial redress.

Claims management companies (CMCs) have been criticised for exploiting consumers' mis-sold payment protection insurance (PPI) and they are responsible for the lion share of complaints. Yet they take a cut – typically 25pc – of any compensation awarded to the consumer. The Government has announced that from 2013 the Legal Ombudsman will handle claims management complaints. The Ombudsman has the legal power to ensure consumers can get compensation where appropriate.

This change will also enable the Claims Management Regulation Unit, which will remain within the Ministry of Justice, to refocus its resources on working with the claims management industry to improve standards and take wider action against CMCs who consistently breach the rules. Head of claims management regulation Kevin Rousell said: “This reform is a win for consumers and provides yet another tool to help stamp out malpractice in the industry.” Chris Lawrenson, head of legal services at the Building Societies Association said: "The matter is urgent as it is clear that the CMCs operating in the PPI sector are generating by far the most consumer complaints, 74pc according the Ministry of Justice.....Read more here: Claims management companies to be held accountable by Ombudsman