Claims management firms have creamed off almost £4 billion from the payment protection insurance (PPI) payouts by banks, Glasgow solicitor Mike Dailly has said in a speech in Rome.
Mr Dailly, pictured, chairman of the Financial Services Consumer Panel's working group on insurance, told the European Credit Convention: "Regulators face a huge challenge to ensure industry treats customers fairly.
"We are pleased to see that the FCA (Financial Conduct Authority) is working proactively to try to avoid future problems in the general insurance market."
He went on: "The PPI mis-selling scandal is a salutary lesson in what happens when regulation is insufficiently robust and intelligent - £11.5bn has been refunded in mis-sold policies since January 2011.
"Industry and regulators must learn the lessons of the PPI debacle, and also ensure that consumers know where to go for help.
"Almost one-third of consumers' refunded PPI cash was swallowed by hungry claims management companies.
"This wasn't in the interests of either consumers or the industry."
Mr Dailly said the new regulator would be "far better equipped to get to grips with underlying market issues" than the old Financial Services Authority, and it was already looking at competition issues, insurance 'add-ons' and comparison sites.
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