The Claims Management Regulator at the Ministry of Justice (MoJ) can at present only take action against authorised companies, and cannot levy sanctions against individual senior managers.

Likewise – at least until a proposed change in the law is enacted – the Information Commissioner’s Office (ICO) can only fine the company concerned when breaches of data protection law occur, and cannot pursue the company’s directors.

Hence when the MoJ cancels a company’s permission, it can sometimes be difficult to stop the senior managers of the previous company re-entering the industry in another guise. Furthermore, many companies have been said to be putting themselves into voluntary liquidation to avoid paying ICO fines.

However, the case of Ben Michael Winchester illustrates how directors of claims management companies (CMCs) can still be held individually accountable under the present regime. Mr Winchester has been disqualified from acting as a director for six years.

Mr Winchester’s company, Falcon & Pointer, made many nuisance calls regarding its claims management services, amongst other failings.

The MoJ cancelled the company’s authorisation in January 2016 after it was found to have made almost 40 million automated calls over a three-month period to promote its payment protection insurance claims services. Automated calls are only permitted where the recipient has given express consent to receiving them, and including an option within the call to decline future marketing calls is not sufficient.

Falcon & Pointer also pressured clients into signing contracts, and took payments, without allowing the clients time to understand the contract terms.

At the time, Kevin Rousell, head of the Claims Management Regulator, said:

“Falcon & Pointer has demonstrated the worst excesses of the industry. This firm clearly set out to plague the public and rip off consumers.”

In March 2016, Falcon & Pointer was fined £175,000 by the ICO over its massive breaches of the law regarding marketing calls. Not only did it make automated calls to individuals who had not consented in advance to receiving them, but the ICO enforcement notice also stated that:

  • The calls did not clearly identify the name of the company making the communications
  • Many calls were made at unsocial hours
  • The company made a further 2,475,481 automated direct marketing calls after it told the ICO it had ceased this practice

Swansea-based CMC Falcon & Pointer entered liquidation in June 2016, and the ICO fine was never recovered.

As a result of his conduct, and the failings of his company, Mr Winchester has now been banned by the Insolvency Service “from being directly or indirectly involved in the promotion, formation or management of a company for six years from 24 July 2017.”

Aldona O’Hara, Chief Investigator at the Insolvency Service, said:

“Directors who breach the rules made to protect members of the public can expect to be investigated by the Insolvency Service and enforcement action taken to remove them from the market place.”

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.