A sole trader in the claims management sector has lost her appeal to the First-Tier Tribunal (General Regulatory Chamber) Claims Management Services and must now cease carrying out claims management activity in the UK.

The individual was actually resident in India but required authorisation from the Claims Management Regulator at the Ministry of Justice (MoJ) as she offered services in the UK. Her India-based call centre supplied leads to UK-based companies concerning payday loan, payment protection insurance, personal injury and pensions claims.

The MoJ had previously imposed four conditions on her claims management authorisation, which were:

  1. Maintain, and provide to the Regulator on request, recordings of all sales calls between the business and its clients and prospective clients
  2. Inform the Regulator of any third party to which she is contracted to provide leads or claims
  3. Inform the Regulator of any third party from which she obtains personal data for the purposes of carrying out regulated claims management activity
  4. Inform the Regulator of the details of any marketing campaigns

The MoJ believed that she had breached all four of these conditions, and had also breached General Rule 15 of its rulebook – the requirement to be registered with the Information Commissioner’s Office in the UK – and General Rule 2e – the requirement to ensure that any referrals, leads or data from third parties have been obtained in accordance with the requirements of the legislation and Rules.

The MoJ said:

“[Name of individual]’s failings were not minor breaches, but systemic failings to comply with her conditions of authorisation demonstrating a disregard for her regulatory obligations and previous enforcement action. As a consequence, the Regulator cancelled her authorisation in order to protect the public.”

Her grounds for appeal included:

  • On the first condition, she said that she had recorded most of the calls, but that her call recording system was not infallible
  • Regarding the second condition, she acknowledged that she was late in reporting details of seven of her clients to the MoJ, but she pointed out that on average these notifications were only seven days late. She argued that this does not constitute a major breach, and that there was no intention to withhold information
  • Regarding the third condition, she acknowledged that she took 46 days to provide details of one company from whom she obtained leads, but that this notification was only 18 days overdue
  • Regarding the fourth condition, she said that she did not initially appreciate that a telemarketing campaign would be classified as a marketing campaign which the regulator would need to know about

In delivering its judgement, the Tribunal noted:

  • The first condition required that she invested in a system which ensured that all calls with consumers would be recorded, and as her system was not able to do this, it was always likely to be the case that she could not meet the terms of this condition
  • For the second and third condition, it was acknowledged that the delays in providing the requested information were not in themselves significant, however details of these third parties were only reported to the Regulator in response to a specific request that the Regulator made. The Tribunal therefore concluded that that she would not have provided the information were it not for that request
  • For the fourth condition, the Tribunal said it was “implausible” to suggest that a telemarketing campaign would not meet the definition of a marketing exercise.

In all four cases, the Tribunal said that she had committed a serious breach.

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