Swansea-based claims management company (CMC) Arb Advisory Limited has been fined £119,500 by the Claims Management Regulator at the Ministry of Justice (MoJ). Many of the company’s rule breaches relate to the way it handled complaints.
The regulator says that the company was in breach of as many as nine sections of its rulebook:
• General Rule 2d – which requires companies to conduct themselves responsibly and to maintain appropriate records and audit trails
• General Rule 5 – which is the generic requirement for all authorised firms to observe relevant laws and regulations
• Client Specific Rule 18 – companies must keep clients updated as to the progress of their claim
• Client Specific Rule 1a – which simply asks that companies act fairly and responsibly towards clients
• General Rule 8 – this is the generic requirement to operate a complaints scheme in accordance with the MoJ rules
• Complaint Handling Rule 4 – companies must have a written complaints procedure for handling any expression of dissatisfaction about their service
• Complaint Handling Rule 9 – companies must ensure all employees (including those employed by their introducers) are aware of the complaints procedure and what it contains, and must carry out monitoring to ensure that employees comply with their obligations under this procedure
• Complaint Handling Rule 10d – responses to complaints must fully address the subject matter of the complaint and the company should offer redress where appropriate
• Complaint Handling Rule 18 – companies must maintain records of all complaints received and make these available to the MoJ as required
CMCs should now be used to the complaints regime that has been in force since January 2015. Companies must acknowledge and investigate all complaints, whether these relate to issues over costs and charges, whether the promised service has been delivered, allegations of inappropriate advice, not keeping the client informed, or any other issue.
Companies must offer redress to clients where appropriate, and all clients must be informed of their right to refer the company’s resolution of the complaint to the Legal Ombudsman. The Ombudsman has the power to issue legally binding instructions for CMCs to pay up to £30,000 per case in compensation.
Complaints must be acknowledged in writing within five business days of receipt. A CMC must issue a final response letter when the investigations into the complaint have completed, explaining: whether the complaint has been upheld or not, the reasons for the decision and details of any redress being offered
All staff within the CMC should have been trained as to how to recognise a complaint, and what to do on receipt of a complaint
The company’s written complaints procedures must be provided to clients in the following instances:
• Prior to them signing a contract with the CMC
• Whenever a complaint is made
• Whenever they request a copy
Arb Advisory, which handles payment protection insurance claims, was the subject of a 2014 article in The Guardian. The newspaper highlighted the case of a reader who said his grandmother had been repeatedly coerced into making a claim through the firm. When she eventually agreed, a fee of £360 was instantly taken from her account, even though MoJ rules forbid CMCs to take fees before a written contract has been signed.
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.