The Claims Management Regulator at the Ministry of Justice (MoJ) has imposed a £50,000 fine on Birmingham-based financial services claims management company (CMC) UKMS Money Solutions Limited.

Like so many of the companies against which the regulator has taken action, UKMS was in breach of General Rule 2 of the Conduct of Authorised Persons Rules 2014, which deals with ensuring referrals, leads and data have been obtained in accordance with the regulator’s rules and applicable legislation; and also requires companies to maintain appropriate records and audit trails.

They also failed to comply with Client Specific Rule 1c, which requires all information given to clients to be ‘clear, transparent, fair and not misleading.’

In November 2015, UKMS was fined £80,000 by the data protection watchdog, the Information Commissioner’s Office (ICO), for sending more than 1.3 million spam texts regarding payment protection insurance claims. It is unclear from the MoJ’s enforcement notice if their fine relates to the same issue.

UKMS conducted a large scale marketing campaign in spring 2015, which resulted in 1,442 complaints to the ICO and/or to the 7726 spam text reporting service.

The ICO decided that UKMS had breached Regulation 22 of the Privacy and Electronic Communications (EC Directive) Regulations 2003 (PECR). Companies cannot send marketing texts unless the recipient has explicitly agreed to receive them, and including an opt out option within the text message is not sufficient. The only permitted exception to this is where the person’s contact details have been obtained “in the course of the sale, or

negotiations for the sale of a product or service.” In these circumstances, a company can send the individual marketing information about similar products and services. The company must also give the person a simple means of opting out of electronic marketing communications both at the time the information was collected, and when each marketing communication is sent.

This action follows the ICO’s recent actions against three companies, all in the Manchester area.

The most startling case was that of Altrincham-based Advanced VOIP Solutions Ltd, who were fined £180,000. The company made large numbers of automated calls regarding insurance, packaged bank accounts (PBAs) and flight delays. Even if customers followed the instructions in the call to opt out of receiving future calls, the calls continued, with some households reporting as many as 50 calls a day.

Central Manchester-based Quigley & Carter Limited was fined £80,000 for sending thousands of unsolicited texts regarding PBA claims. This company relied on third party firms to send its texts, however one of the third party firms it used, Help Direct UK Limited, has itself been fined by the ICO in the past. The MoJ and ICO have both reported many instances of companies attempting to deflect blame for their marketing practices to introducers, list brokers and other third parties.

Bury-based Central Compensation Office Ltd was not fined, but was issued with a Stop Now order by the ICO after making live marketing calls to individuals registered with the Telephone Preference Service. If the order is breached, a criminal prosecution could follow. The company trades as Industrial Workers Office and National Advice Clinic.

CMCs should also note that although PECR was a piece of European legislation, its provisions have been incorporated into UK law. The vote to leave the European Union does not affect PECR in any way, and the legislation will remain in force unless the UK Government decides to repeal it.

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.