Subject to appeal, MJE Associates (Wales) Ltd has been stripped of its authorisation to provide claims management services.
The Claims Management Regulator at the Ministry of Justice (MoJ) took action against the Llanelli-based claims management company (CMC) after it breached the rules in a number of areas, including:
- The way it handled claims it received
- Lead generation
- Direct marketing
- The competence of its management
- Compliance with data protection law
Many of these are similar to the reasons why action has been taken against other CMCs, however the failings related to data protection and claims handling are perhaps seen less frequently in MoJ enforcement notices.
The MoJ enforcement notice says that MJE – a financial claims company – breached sections a) to e) of General Rule 2 of the Conduct of Authorised Persons Rules 2014. These sections of the rulebook ask that:
- CMCs must investigate whether grounds for making a claim exist, and if so whether the claim is likely to succeed
- When making representations to a third party to substantiate the claim, CMCs must ensure that the evidence submitted must be specific to each claim and not fraudulent, false or misleading
- When a claim is referred to a recognised Ombudsman, such as the Financial Ombudsman Service, the CMC must comply with the Ombudsman’s procedures, provide specific information in support of individual claims and take account of that Ombudsman’s relevant past decisions when considering the merits of a claim
- CMCs must maintain appropriate records and audit trails of all their activities
- CMCs must ensure that leads, referrals and data obtained from third parties have been sourced in compliance with the MoJ rules and relevant legislation
MJE also failed to comply with four other sections of the MoJ’s rules:
- General Rule 3 – which requires a CMC’s management and directors to be competent and to understand the legislation and rules relating to regulated claims management services
- General Rule 5 – which simply asks CMCs to observe all relevant laws and regulations
- General Rule 15 – which asks CMCs to register with the Information Commissioner’s Office, as required under the Data Protection Act 1998, and comply with relevant data protection legislation
- Client Specific Rule 4 – which bans personal cold calling, such as calling door-to-door, or stopping passers-by; and also demands that marketing by telephone, email, fax or text shall be conducted in accordance with the Direct Marketing Association’s Code and any related guidance issued by the Association
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