A number of claims management companies (CMCs) have lost their authorisation recently for issues such as making unsolicited calls or contract irregularities.

Harrogate-based Reclaims Management (UK) Limited, which traded as The Claims Management Company, has now been stripped of its authorisation by the Claims Management Regulator at the Ministry of Justice (MoJ). According to the MoJ’s notification, the main reason the company is no longer permitted to carry out claims management activity is its failure to co-operate with its regulator.

The company was said to be in breach of three sections of the Conduct of Authorised Persons Rules 2014:

  • General Rule 10 – the need to comply with the regulator’s Client Account Rules
  • General Rule 11 – the requirement to comply with the MoJ’s monitoring and enforcement arrangements
  • General Rule 16 – an obligation to provide the regulator with any information it requests within a reasonable timescale, and for this information not to be false or misleading

The Client Account Rules set out a series of requirements for CMCs regarding issues such as paying money into or taking money out of client accounts, accounting practices, reconciliations and financial record keeping.

CMCs need to be aware of all their obligations under the Conduct of Authorised Persons Rules, but they also need to be open and co-operative with their regulator at all times. They should comply promptly with MoJ information requests.

In May 2016, Chorley-based Check Point Claims Limited was stripped of its authorisation after it was found to have made millions of unsolicited and misleading automated calls marketing its hearing loss claims services. The company was later fined £250,000 by the data protection watchdog, the Information Commissioner’s Office (ICO).

Earlier this year, Swansea-based Falcon & Pointer was also stripped of its authorisation by the MoJ, and was then fined £175,000 by the ICO. This company made some 40 million automated nuisance 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, nor is screening the recipients against the Telephone Preference Service list. Falcon & Pointer also pressured clients into signing contracts, and took payments without allowing clients time to understand the contract terms.

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.