The rise and fall – and rise – of claims management companies

This week, the news is full of stories about how claims management companies have been still causing trouble, even after almost being stamped out by new laws.

The good news is that claims management companies are nowhere near the personal injury claims juggernaut they were years ago. In fact, when you look at the number of CMCs out there, there are 45 per cent fewer of these companies out there than there were in December of 2011, when the Ministry of Justice threw the book at them. There’s only 1400 of these firms in operation as of last month, and they’re not nearly as aggressive and obnoxious when it comes to pursuing unsolicited business by bothering people who might be interested in bringing accident claims after an injury.

CMCs were absolutely notorious for bringing as many claims as they possibly could in order to profit off of legal fees. Companies would more or less throw everything they could at the wall in order to see what stuck, then move on to the next batch of people who might have valid claims by buying customer information from organisations like insurance companies, who would supply these CMCs with the names and phone numbers of people who had been involved in road traffic accidents.

In other words, the majority of this type of activity is a thing of the past thanks to new regulations that curbed that sort of devilish behaviour. However, there are still plenty of CMCs out there causing mischief, and one insurer recently had to warn countless customers that claims management companies may come knocking once more.

Car insurance firm Aviva recently had to swallow its pride and notify tens of thousands of drivers that two former employees took countless accident records and sold them on to claims management companies for their own personal gain. Many of these customers have already inundated with unsolicited phone calls as a result, prompting Aviva to issue abject apologies and to alert the authorities to combat the fraud. It’s infuriating to say the least, but also ironic if you ask me; a company that used to sell that sort of information to CMCs directly is now upset that its employees were doing it behind its back! I suppose it’s a bit of poetic justice.

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