In its latest enforcement bulletin, the Claims Management Regulator at the Ministry of Justice (MoJ) says that “mis-sold PPI claims remain the most active area in the financial claims sector with advertising for claims increasing throughout 2017 and into 2018.” Much of the regulator’s recent enforcement action has indeed been in this area.

Between January and March 2018, the MoJ visited 103 claims management companies (CMCs) and conducted 95 formal audits. This resulted in two companies losing their authorisation, two more being fined and 31 receiving warnings. Five new investigations into authorised CMCs commenced during this three-month period, as did one investigation concerning an unauthorised company.

In the 12 months to March 31 2018, the MoJ banned 45 companies, fined a further six and issued a total of 252 warnings. 27 investigations concerning the activities of authorised companies commenced, as did six investigations surrounding unauthorised companies.

In the payment protection insurance and other financial claims sector, the period from January to March saw the MoJ successfully defend appeals by two companies against regulatory sanctions. One company received a ban from operating in the claims marketplace, imposed for failings that included complaints handling issues and the competence of its senior management. The second company was fined £553,000 over issues with its marketing practices.

The enforcement bulletin also makes reference to the fact that two CMC directors have been disqualified for 11 and six years respectively. Their companies engaged in misleading marketing and took unauthorised fees from clients, amongst other issues.

Regarding personal injury claims, the bulletin says that the MoJ is still finding evidence of CMCs flouting the referral fee ban, some five years after it came into force. The regulator also remains concerned about fraudulent activities by personal injury companies, especially those specialising in holiday sickness claims.

During the period from January to March, one CMC was stripped of its authorisation and two more were fined for breaching marketing law. The company that was banned was sanctioned for sending SMS marketing without consent and supplying false and misleading information to the Regulator. The companies that were fined both failed to conduct sufficient due diligence on consumer data it had acquired, to evidence that the individuals had consented to receiving marketing communications.

The MoJ also successfully defended appeals made by two companies, who respectively received a ban and a fine for sending nuisance calls or texts, although in one case, the Tribunal amended the amount of the fine. The CMC that was banned failed to conduct due diligence on the data it obtained, and there were also concerns over the competence of the company’s management. The company that was fined was also punished for inadequate due diligence of data.

Whilst the bulletin focuses primarily on enforcement, the MoJ also takes the opportunity to remind CMCs of the need to comply with the new General Data Protection Regulation, and highlights that the Financial Conduct Authority (FCA) has already launched a consultation ahead of the forthcoming handover of regulation. The FCA is expected to regulate CMCs across the UK, including those based in Scotland, from spring 2019.

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article