Urgent Appeal to achieve tighter regulation of Claims Management Companies and to stop the instigation of fabricated complaints. Open Letter to Nic Dakin MP and Helen Grant, Minister for Justice. Dear Sir, Madam, We, as part of ‘cherry’, the largest community of mortgage and financial intermediaries, would like to thank Mr Nic Dakin MP and those colleagues who supported him, for their input on the issue of tackling poor practices by Claims Management Companies, in a recent adjournment debate. We would also like to express our unequivocal support. In addition, however, and while we appreciate the efforts that the Ministry Of Justice has made with regard to this matter to date, we must say that there nevertheless remains a very significant issue with regard to the way these firms operate. Their current practices encourage the instigation of falsified complaints which threaten to overwhelm and ultimately decimate smaller intermediaries, thereby leading to less, not more, consumer choice. We believe strongly that this, left unchecked, will become yet another extension of the 'whiplash' culture which the government already recognises is out of control. For FOS to continue their current approach, which verges on a belief that consumers only complain when they have to, is extremely dangerous to the health of small businesses and, indirectly, to the general public in terms of access to low-cost independent mortgage and protection advice. May we respectfully request that a 'root and branch' review of the practices of CMCs be undertaken immediately with this review to include consideration of the MOJ's regulation of Claims Management Company practices as well as the current arbitration procedures overseen by the FOS which, in our view, are weighted unfairly and far too heavily against intermediaries. A fairly cursory analysis of FOS statistics would show that the proportion of rejected complaints is likely to reflect those of the FSA. Astoundingly, the typical complaints upheld percentage for the major banks in the first half of 2012 was above 75% for General Insurance complaints, mainly relating to PPI. Sesame, the largest network representing small firms, had a percentage upheld of only 8%. This is largely because the banks were self-confessed perpetrators of mis-selling of PPI insurance whilst small advisory firms rarely sold this type of product, but are being heavily targeted by Claims Management Companies with fabricated PPI complaints (FSA Complaints Data - http://www.fsa.gov.uk/library/other_publications/commentary/firm_spec) This form of fabrication is now being utilised for the wave of mortgage complaints that are beginning to hit our industry. The vast majority of financial intermediaries are honest, hard working individuals who take care to provide a valuable service to their clients and wish to be able to continue doing so without having to manage unfair, expensive and time consuming accusations which frequently have no basis in fact. This achieves little for consumers misled into making complaints for products that they never had, but causes severe distress, inconvenience and financial loss to the ultimate victims of what could easily be deemed criminal activity.