The Ministry of Justice (MoJ) closed more than 200 claims management companies in a six-month period as part of a crackdown, figures show.
The MoJ's Claims Management Regulation Unit shut down 209 claims firms between April and November last year, it said.
Three more rogue firms were suspended and a further 140 were warned.
Claims firm advertise on TV, newspapers and the internet, encouraging people to sue for the mis-selling of payment protection insurance and for other losses. Some also use cold-calling.
The MoJ unit is also working with the UK's data watchdog to tackle firms who break the law with unsolicited calls and texts, it said.
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