A number of important issues are once again covered in the Claims Management Regulator’s regular bulletin to claims management companies (CMCs).

Firstly, companies are alerted to the Government’s review of the regulatory system for the claims management industry. A link is provided to the consultation document, and companies are invited to participate in this consultation. Another consultation will take place in due course over plans to cap the level of charges CMCs can impose on their clients.

The second section makes reference to the first two claims management practitioners to receive fines from the Regulator. The Hearing Clinic was fined £220,000 for making large numbers of unsolicited marketing calls, some to consumers who had registered with the Telephone Preference Service; and Rock Law Limited was fined £567,423 for taking payments from clients without express permission being given, and for pressurising clients into accepting their terms and conditions.

CMCs who introduce personal injury claims to solicitors are reminded that they cannot engage in cold calling in order to obtain clients. Anyone who is contacted must have given their explicit consent to being called about a claim, and their contact details must not have been obtained via an unsolicited communication (via telephone or personal contact). A CMC will still be held responsible if the details were obtained in an inappropriate way by a third party acting on their behalf.

Next, companies are alerted to the possibility of having enforcement action taken against them should they supply incorrect or misleading information to the Regulator. CMCs are warned that the Regulator will be increasing the level of checks it carries out regarding accuracy of information. Examples given in the bulletin include companies stating an incorrect figure for their annual turnover, and a claims management practitioner who failed to disclose his outstanding County Court Judgements when applying for authorisation.

The bulletin then mentions that it is a criminal offence to carry out claims management services without authorisation, and that it is also an offence to claim to be authorised when this is not the case. The Regulator can initiate criminal prosecutions of unauthorised firms, and can also take enforcement action against CMCs who are found to be supporting unauthorised firms in any way. The case study examples in the bulletin include a claims management practitioner who was jailed for four years for fraudulent activities carried out whilst operating an unauthorised claims management company.

CMCs are asked to note that the Regulator will be informed every time a company fails to adequately co-operate with the Legal Ombudsman regarding the investigation of a complaint. The Regulator can take enforcement action in these circumstances. All requests from the Ombudsman must be complied with promptly.

Finally, the Department for Culture, Media & Sport has launched a competition, where respondents are invited to propose solutions to the problem of nuisance calls.

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.