10May

The Claims Management Regulator at the Ministry of Justice (MoJ) has withdrawn the authorisation of Ammanford, South Wales-based Your Money Rights Limited. Some of the reasons why it has been stripped of its authorisation are similar to the reasons the MoJ has taken action against other claims management companies (CMCs), however in this case the company also failed to co-operate with the regulator’s efforts to supervise the company.

Financial claims company Your Money Rights breached General Rule 11 of the Conduct of Authorised Persons Rules 2014, which stipulates that companies must comply with the MoJ’s monitoring and enforcement arrangements. It also failed to observe General Rule 16, which requires CMCs to notify the MoJ within 20 working days if any of the information they provided in their authorisation application subsequently changes. Rule 16 also asks that any additional information which the Regulator requests from a company is also supplied within 20 working days. The Rule adds that the information provided ‘must not be false or misleading’.

Companies in regulated industries must co-operate with their regulator at all times. Information they supply to a regulator must be accurate; a full and transparent response must be submitted if the regulator requests any information from the company; and if the regulator wants to conduct an inspection visit or formal audit, then the company must accommodate their request and give the regulator full access to their systems, procedures and records.

Your Money Rights also failed to comply with the following sections of the Conduct of Authorised Persons Rules:

• General Rule 1 – which asks that CMCs display honesty and integrity.
General Rule 5 – the generic requirement to observe all applicable laws and regulations
• Client Specific Rule 1a – which asks CMCs to act ‘fairly and reasonably’ in dealings with clients
• Client Specific Rule 1c – which requires all information given to clients to be ‘clear, transparent, fair and not misleading’
Client Specific Rule 3 – which forbids anything that might be described as ‘high pressure selling’

The MoJ did not withdraw the authorisation of any CMCs during the first quarter of 2017, but this is at least the second time that the Regulator has taken the ultimate sanction in the second quarter.
The MoJ has already publicised its ban on Barrington Claims Limited, which breached 12 separate areas of the Conduct of Authorised Persons Rules. Many of the breaches committed by Barrington Claims have also been cited in past MoJ enforcement notices concerning other companies. However, unlike many CMCs who have been subject to action, Barrington Claims was in breach of Client Specific Rule 12, which forbids a claims company from stating or implying that their clients have a greater chance of success by pursuing a claim with them, compared to their chance of success were they to pursue a DIY claim.
Other breaches committed by Barrington Claims included:
• Failing to satisfy itself of the merits of a claim before pursuing it
• Not maintaining appropriate records and audit trails
• Failing to ensure that referrals, leads and data obtained from third parties have been obtained in accordance with applicable rules and legislation
• Neglecting to ensure that all information given to clients is ‘clear, transparent, fair and not misleading’
• Engaging in high pressure selling
• Stating or implying that they are connected with the Government, a regulator or a public body; or that the Government has in any way endorsed the company
• Failing to check that clients understand the contracts they are asked to enter into

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.