The new April 2018 compliance bulletin for claims management companies (CMCs) contains a lot of important information, and companies authorised by the Ministry of Justice (MoJ) would do well to read this document closely.

Unsurprisingly, the first issue covered in the bulletin is data protection. The introduction of the General Data Protection Regulation (GDPR) is now little more than one month away, and CMCs should ideally have already made preparations for its introduction. However, it is never too late to address the issue of improving data security within companies, and CMCs are again urged to read the ’12 steps to take now’ document, the ‘GDPR checklist’ and the other information on the Regulation that has been published by the Information Commissioner’s Office.

The next issue is possibly being highlighted in an MoJ bulletin for the first time, and it concerns outstanding funds in client accounts where the company is unable to trace the client. The regulator says that CMCs should make all reasonable efforts to trace the individual via: email; post; telephone calls; texts; information held by third parties, such as the firm who are the subject of the complaint; telephone directories; the electoral roll; and internet and social media searches. If these efforts fail, the bulletin highlights the availability of other tracing and forwarding services, such as those offered by the Department of Work and Pensions. CMCs should record on the client file details of all attempts they have made to trace the client. If all options for tracing the client have been exhausted, the company should contact the MoJ for further advice.

Next, CMCs are reminded that all marketing must be “clear, transparent, fair and not misleading.” The bulletin highlights two specific issues, namely that marketing material must always clearly identify the name of the advertiser, and also that the regulator does not approve of marketing that suggests consumers can find out immediately whether they might have grounds for a claim. With regard to the latter issue, the bulletin says that wording such as “Try this brilliant new trick to find out if you have a PPI claim”, “Find out in 30 seconds if you have a PPI claim” and “Look up your name to see if you get a PPI payout” is likely to be considered “misleading” or “sensational” by the regulator.

CMCs handling Plevin-related payment protection insurance claims are urged to re-read previous guidance issued by the regulator on this topic.

Companies are reminded that the new Conduct of Authorised Persons Rules are now in force. Changes to the rules include: a ban on upfront fees for PPI and other financial claims, a ban on imposing any charges where the client does not have a relationship or relevant policy with the firm in question, and a requirement to ensure that all cancellation charges are reasonable – an itemised bill setting out details of what the cancellation charges relate to must also be provided.

The third reading and report stage of the Financial Guidance and Claims Bill in the House of Commons did not proceed as scheduled in March 2018, due to other urgent parliamentary business taking precedence. However, the Financial Conduct Authority (FCA) has said it still expects to take over as claims management regulator in spring 2019, and that it will consult later this year on proposed new rules for the claims sector.

Finally, CMCs are encouraged to read the third quarter enforcement bulletin issued by the MoJ. Reasons why other companies were subject to enforcement action can often provide a valuable ‘compliance checklist’ for the sector as a whole.

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