The number of Claims Management Companies (CMC’s) that have been shut down by the Ministry of Justice over the past five years is fast approaching the 1000 mark, after another 209 had their licenses revoked in the latest clean-up.

Despite this, the number of CMC’s still operating is abundant, offering to chase cash pay-outs on your behalf for everything from PPI claims to personal injury compensation cases. Generally speaking, CMC’s don’t care whether they are chasing big banks or ambulances, as long as there is a chance that they can charge the customer a fee for doing so.

The outgoing FSA has even gone as far as describing them as “a cancer on the industry”.

Fuelled by the huge sums that banks have set aside to compensate consumers who were mis-sold Payment Protection Insurance – a sum which is set to exceed £10 billion – a whole new swathe of CMC’s has sprung up in recent years, many of which are happy to resort to any tactic in order to attract business.

The Claims Management Regulation Unit of the MoJ has already taken action against hundreds of firms who were found to be in breach of its guidelines, including misleading advertising, unsolicited calls and texts and unfair charges. Many firms work on a ‘no-win, no-fee’ basis (though the ‘fee’ when claims are successful are often astronomical) but others force consumers to part with money before any work is even started.

A number of firms have also been found to be pursuing cases that stood no chance of success, and even of fabricating claims for non-existent credit agreements.

Given that these firms have no more legal power or chances of success than if you were to file a claim yourself, the MoJ is to be given more power to prevent consumers – many of whom are already financially vulnerable – from being ripped off.

Under new rules, CMC’s will be forced to enter into a formal contract with a consumer in advance of any work being undertaken, with clearer routes of complaint and compensation if rules are broken.

Even once the PPI re-claiming bubble has burst, it’s a safe bet that CMC’s will simply find a new angle to focus on and bombard us via daytime TV adverts, text message and (the one I find most annoying) automated phone calls.

Any regulation that means less of these is good thing in my book.