The Claims Management Regulator at the Ministry of Justice (MoJ) has published details of the action it has taken against Swansea-based claims management company (CMC) Falcon & Pointer Limited.
The MoJ has cancelled the company’s authorisation after the CMC 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.
The company was in fact in breach of as many as six sections of the Conduct of Authorised Persons Rules.
General Rule 2 requires companies to conduct themselves responsibly and with diligence. The company was in breach of four of the requirements of Rule 2: making reasonable attempts to establish the merits of a claim, making case specific representations on each claim, maintaining necessary records and establishing that leads from third parties have been legitimately obtained.
General Rule 5 simply asks that companies observe all applicable laws and regulations.
Client Specific Rule 1b requires companies to ensure that their service meets the needs of the client.
Client Specific Rule 4 prohibits cold calling in person; and requires all marketing activity to comply with the Direct Marketing Association (DMA)’s Code and other DMA guidance.
Client Specific Rule 11 concerns contracts between CMCs and their clients. Requirements in this area include that contracts must be signed by the client, and that payment cannot be taken until the contract has been signed. Before a contract is agreed, the following information must be provided to the client in a durable medium:
• The risks of making a claim, including the risk of losing money, or the risk of being subject to legal action
• The nature of the service to be provided
• Any additional contracts, such as for insurance or loans, that the client will be requested to enter into
• The company’s charges, giving a cash example if this is calculated on a percentage basis
• Details of any referral fees paid
Finally, Client Specific Rule 16 requires companies to allow clients to exit contracts at any time. Any charge levied on withdrawal must be reasonable and must reflect the work undertaken by the company on the client’s behalf.
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. They ignored warnings by us and the Information Commissioner’s Office, and today have had their licence revoked as a result of that wilful ignorance.”
The Government is proposing new legislation that will make it illegal for companies to hide their number when making marketing calls. Any breach of the proposed new law would result in a fine of up to £500,000.
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.