A claims management company encouraging people to make fake or exaggerated holiday sickness claims has had its licence cancelled.
It is understood to be the first claims firm operating in the holiday sickness sector to have its licence revoked.
An investigation by the Ministry of Justice’s Claims Management Regulator (CMR) revealed that Lancashire-based Allsure Ltd had “encouraged holiday-goers to fabricate or embellish symptoms of gastric illness to get compensation”.
The MoJ said further evidence showed the firm had “used deceptive sales scripts” and in turn “exaggerating expected pay-outs to entice consumers”.
The cancellation of Allsure’s licence means that it can no longer offer regulated claims management services to new or existing clients.
During the CMR audit, “potential systematic failings” were found within Allsure’s sales scripts and call recordings.
The company was found to have breached conduct rules by making false or unsubstantiated claims to customers and coaching them into providing answers needed to make the criteria of making a claim.
Allsure, based in Preston, has been in the personal injury claims sector since April 2014.
Kevin Rousell, head of the Claims Management Regulator said: “We will take firm action against claims businesses which engage in serious misconduct.
“Seeking to encourage false claims will not be tolerated.”
Based at the Ministry of Justice, CMR regulates companies that offer to help people claim compensation for issues such as personal injury and mis-sold financial products.
The action taken against Allsure Ltd is the latest in a series of moves by government to crackdown on fake sickness claims, following a surge in claims for gastric illnesses being brought by British holidaymakers.
Abta reported a 500% rise in claims, prompting its Stop Sickness Scams and Travel Weekly’s Fight Fake Claims campaigns.
Abta has warned holidaymakers not to be tempted to make false or exaggerated claims if they receive cold calls from unscrupulous claims management companies.
In July ministers stepped in to reduce cash incentives in bringing spurious claims against package holiday tour operators. Under these proposals, which are yet to be law, tour operators would pay a prescribed sum depending on the value of the claim, making the cost of defending a claim predictable.