The Ministry of Justice’s Claims Management Services Regulator is to examine the relationship between firms that encourage tourists to lie about holiday sickness and solicitors who take the cases on.
The MoJ told the Daily Mail: "Tackling fraud in the claims management industry is a key priority and the Claims Management Services Regulator has taken significant steps to clean up this area.
"We have tough sanctions for firms that break the rules, and if any wrongdoing is discovered, we will take the necessary action."
ABTA believes claims management companies are moving into holiday market after the Government tightened up legislation over other times of personal injury claims.
Chief executive Mark Tanzer said: "Last year our members informed us that they were seeing dramatic increases in the number of gastric illness claims. The level of claims far exceeded the reported sickness levels in resorts."
