The Claims Management Regulator at the Ministry of Justice (MoJ) has withdrawn the authorisation of Llanelli-based Barrington Claims Limited. The company, which handled financial claims, was found to have breached 11 different sections of the Conduct of Authorised Persons Rules 2014.
Many of the breaches committed by Barrington Claims have also been cited in past MoJ enforcement notices concerning other companies. However, unlike many claims management companies (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.
This rule applies to any claim that could potentially be covered by the Criminal Injuries Compensation Authority, the Financial Ombudsman Service (FOS), the Financial Services Compensation Scheme, the Housing Ombudsman Service or any other recognised dispute resolution procedure. Claims concerning payment protection insurance, packaged bank accounts, investment and pension mis-selling, or any other financial service, would typically come under the jurisdiction of the FOS. The FOS has repeatedly produced data showing that consumers’ chances of a successful claim are not in any way boosted by choosing to use a CMC.
The other sections of the rulebook breached by Barrington Claims were:
• General Rule 2a – the need for a CMC to satisfy itself of the merits of a claim before approaching the firm who is the subject of the claim
• General Rule 2d – the requirement to maintain appropriate records and audit trails
• General Rule 2e – which requires CMCs to take reasonable steps to ensure that referrals, leads and data obtained from third parties have been obtained in accordance with applicable legislation and in compliance with the Conduct of Authorised Persons Rules
• General Rule 5 – the general requirement to observe all relevant laws and regulations
• Client Specific Rule 1a – which demands that companies act ‘fairly and reasonably’ in all dealings with clients
• Client Specific Rule 1b – the requirement to provide a service to each client that meets their needs, and satisfies the requirements of the MoJ’s rules
• Client Specific Rule 1c – which asks that all information given to clients is ‘clear, transparent, fair and not misleading’
• Client Specific Rule 3 – the prohibition on engaging in high pressure selling
• Client Specific Rule 6d – which prevents CMCs from 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
• Client Specific Rule 14 – which requires companies to ensure that clients understand the contract they are asked to enter into
The company’s authorisation to conduct claims management activities was withdrawn with effect from April 10, and as of April 13, its website was offline.
The MoJ has also imposed a fine of £6,600 on Colchester-based TDP Direct Marketing Limited, which trades as The Data Partnership, Social Talk and TDP Marketing. The fine was imposed after the MoJ identified breaches of General Rule 2d and General Rule 2e.
TDP handles industrial injuries and personal injury claims, as well as financial claims.
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.