The December 2017 bulletin from the Claims Management Regulator at the Ministry of Justice (MoJ) makes reference to some very important compliance issues. All authorised claims management companies (CMCs) are advised to read this bulletin closely, and to take action where appropriate in response to the issues raised.
Firstly, CMCs are reminded that the implementation date for the General Data Protection Regulation is drawing ever closer. CMCs are urged to read the information on the website of the data protection regulator, the Information Commissioner’s Office (ICO), and to urgently make the required changes to their documentation, practices and procedures. Some of the key elements of GDPR, which comes into force on May 25 2018, include:
- Privacy notices must clearly explain to clients what a firm’s legal basis for processing data is, together with how long the firm will retain the data for. Clients must also be informed that they have a right to complain to the ICO
- Firms will have just one a month to comply with a subject access request, and in most circumstances won’t be able to charge clients for providing the information
Where firms introduce new technology, or where processing is likely to significantly affect individuals, they may be required to carry out a Privacy Impact Assessment, considering the impact the change would have on the data protection rights of clients
Staff need to undergo training on GDPR and what it means for their role.
Companies that fail to comply with GDPR requirements can be fined up to 4% of annual turnover or €20 million, whichever is higher.
Any company that is unsure as to what GDPR means for them is advised to speak to their compliance consultant.
CMCs who offer clients the option of paying fees in instalments are urged to check whether they need consumer credit permissions from the Financial Conduct Authority in order to do this. To be exempt from the need to obtain this permission, the instalment agreement must be repayable by no more than 12 instalments within no more than 12 months, and must not involve the payment of interest or charges.
The MoJ also notes that a number of companies are assisting clients in making claims relating to cavity wall insulation. It says that in most cases these companies will not need to be authorised, but that some will need authorisation if their work concerns housing disrepair (i.e. claims brought by tenants against their landlords), personal injury caused by cavity wall insulation issues, or mis-selling of a finance agreement linked to the sale of the insulation.
The Financial Guidance and Claims Bill continues its passage through Parliament. CMCs should still expect that, from April 1 2018, they will be unable to charge upfront fees for any financial claim, or for any claim where it is demonstrated that the consumer does not have a relationship with the lender. The Bill also requires CMCs to ensure that all cancellation charges are reasonable and to provide consumers with an itemised bill setting out details of what the cancellation charges relate to.
The bulletin also alerts CMCs to a number of training courses offered by the Legal Ombudsman. The Ombudsman is the professional body that considers complaints concerning CMCs where the client and the company cannot reach agreement.
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.