The Claims Management Regulator at the Ministry of Justice (MoJ) has fined Bournemouth-based claims management company Elkador Finance £315,000. The company is said to have committed ‘serious breaches’ in failing to ensure that customer data from third parties was obtained legally.

The company, which handles financial claims, personal injury claims and criminal injuries compensation, was found to have breached three sections of the MoJ’s Conduct of Authorised Persons Rules:

• General Rule 2d – the requirement to maintain appropriate records and audit trails
• General Rule 2e – the need to ensure referrals, leads and data sourced from third parties have been obtained in accordance with applicable rules and legislation
• Client Specific Rule 9 – the need to ensure marketing material issued on a CMC’s behalf by a third party complies with applicable rules and legislation

The company has 28 days to appeal against the fine to the First-Tier Tribunal.

The total amount of fines levied by the MoJ since it gained the power to fine CMCs at the start of 2015 now stands at more than £2 million. The other fines include:

• £850,000 to Zahier Hussain, who trades as National Advice Clinic, the Industrial Hearing Clinic or the Central Compensation Office, for making almost six million marketing calls about compensation for hearing loss. Many of these calls were made to consumers who had registered with the Telephone Preference Service (TPS). The firm also breached rules relating to: record keeping, obtaining leads and referrals and making introductions to solicitors
• £567,423 to Rock Law Limited regarding irregularities in its contracts with clients
£220,000 to Aurangzeb Iqbal, who traded as The Hearing Clinic, also for making millions of unsolicited marketing calls to TPS registered consumers and others about hearing loss compensation
£91,845 to Complete Claim Solutions Limited for unsolicited calls regarding personal injury claims

At the same time, the MoJ announced that it had teamed up with police to conduct raids on two CMCs suspected of acting without authorisation – one in Birmingham and one in Swansea. Both companies are said to have made large numbers of unsolicited cold calls, and the company in Swansea is alleged to have conned customers out of hundreds and thousands of pounds as a result of its marketing practices. At the Swansea company, five individuals were arrested and released on conditional bail. The companies are, according to the MoJ, “thought to be at the centre of large scale and sophisticated cold-calling operations”. Enquiries into both companies are continuing.

Kevin Rousell, Head of Claims Management Regulation at the MoJ, said:

“We have taken swift and decisive action to tackle these sham firms. Our intelligence suggested that these people wanted to defraud the public and cause misery.

“Firms should be in no doubt that if you attempt to operate outside the law and take advantage of vulnerable people – we will seek the most severe sanctions available.”

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.