The Financial Conduct Authority has confirmed a fine for a claims management company that cold called consumers who hadn’t consented to receiving calls.
A £140,000 fine was initially imposed on a Leeds-based firm by the former Claims Management Regulator at the Ministry of Justice in June 2018, as a result of deficiencies in its marketing practices. The penalty was subsequently reduced to £110,000 in August 2018 after the firm made representations to the CMR and explained how they had amended their processes to ensure that the breach didn’t occur again.
The firm is said to have purchased consumers’ data from third parties without conducting adequate due diligence to ensure the third parties had obtained the appropriate consents. The CMC then proceeded to conduct marketing calls with consumers who were registered with the Telephone Preference Service.
The firm gave notice of its intention to appeal against the fine in May 2019. By the time the Tribunal got round to hearing the case, the FCA had taken over as the regulator of claims management activities. The FCA filed its Statement of Case with the Tribunal on March 10 2021, but the firm then failed to respond to the FCA submission within the following four weeks. This led the Tribunal to strike out the firm’s appeal and confirm that the fine of £110,000 stands.
Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA, said:
“Cold calling customers who elected not to receive sales calls is an example of the type of cavalier behaviour claims management firms should not be engaging in. Firms need to ensure they have the right governance and due diligence in place, and we will take action when we see behaviour that threatens legitimate consumer rights and interests.”