The Ministry of Justice (MoJ) has shut down about one in five claims management companies (CMCs) over the past year, in many cases following complaints from consumers.
According to figures obtained by the Law Society Gazette through a freedom of information request, the MoJ's Claims Management Regulation department 'cancelled' 734 businesses in the 12 months up to the end of March.
Some of the closures were prompted by the 9,570 complaints the MoJ received from the public during the period.
It meant that, at the end of the financial year, the number of authorised CMC businesses stood at 3,018.
CMCs have been in the spotlight in recent months because of their heavy marketing to attract victims of payment protection insurance (PPI) mis-selling.
This has been despite the Financial Ombudsman Service's insistence that consumers do not need to go through third parties to make claims.
According to the Gazette, 57 staff at the MoJ have now been allocated to regulating claims management companies, up from 32 in 2007.
It was recently reported that the MoJ is investigating CMCs after a surge in bogus PPI complaints to banks.
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