The caseload for complaints about claims management companies is well below what experts had expected, new figures have revealed.
The Legal Ombudsman had planned for 3,000 cases a year coming from CMCs when it assumed responsibility for complaints about the sector in January.
But new figures have revealed just 648 cases were accepted in the first six months of the new scheme – despite the service receiving around 1,500 contacts per month.
The majority of closed cases (56%) have been resolved with an informal resolution.
Most complaints (40%) have been about excessive or unjustified fees, with delays (28%) accounting for 28% of complaints. The vast majority (94%) of complaints have been related to financial products and services, most of which are linked to payment protection insurance.
Of the 478 complaints resolved in the first six months, in one-fifth of cases fees were limited or waived and 14% resulted in the ombudsman ordering compensation.
Meanwhile, the Ministry of Justice today started a call for evidence to review the way claims firms are regulated, a step that was forecasted by George Osborne in the summer budget.
Carol Brady, chairman of the Chartered Trading Standard Institutes board, will lead the review which is due to be completed by early 2016. The assessment will ask what powers and resources are needed for a strengthened regulatory regime and what further reforms are necessary.
Proposals are also being developed to cap the fees that regulated CMCs can charge clients in winning cases for financial claims and to ban upfront fees.
Justice minister Lord Faulks said: 'The government is taking action to make sure people aren't having their time wasted or being taken advantage of by the greedy practices of some firms.
'We want to be certain that we are doing all we can to get consumers a fairer deal and rid the industry of rogue behaviour.'
The MoJ, which regulates CMCs, has already banned referral fees and inducements in recent years and removed the licences of more than 1,000 companies since 2010.
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