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Insurers to lose fees for passing on details to crash lawyers


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In the wake of the OFT investigation into car insurance premiums, (http://www.oft.gov.uk/news-and-updates/press/2011/97-11), a fees racket in which insurance firms sell client details to no win, no fee lawyers is to be banned.

 

Insurance companies and claims management firms charge 'referral fees' to pass on details of people involved in accidents to lawyers, who then encourage them to pursue personal injury claims.

 

The claims result in an overall rise in premiums as the insurance industry seek to cover the extra costs

 

The Government announced plans to ban the practice and cut out the 'middle men' who are aiding a 'compensation culture'

 

However there are no plans to stop the payment of a separate fee to police for passing on the deatils of cars involved in accidents to breakdown firms, who then charge for removal and storage.

One police force made £1.3million in one year on 'administration fees'of up to £25 per car.

 

http://www.telegraph.co.uk/finance/personalfinance/insurance/motorinsurance/8751499/Referral-fees-to-be-banned.html

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BBC also reporting.

 

http://www.bbc.co.uk/news/uk-14846666

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