The Claims Management Regulator at the Ministry of Justice (MoJ) has published details of the enforcement action it took against claims management companies (CMCs) between April and June 2015.

One company had their licence suspended during the period, one had the conditions of their licence altered and 69 more were warned. 21 new investigations also commenced during the quarter.

The bulletin then summarises the actions the regulator has taken under three headings: financial services claims, nuisance calls and personal injury.

The MoJ continues to have particular concerns about the compliance standards being displayed by financial services CMCs, including those that handle payment protection insurance and packaged bank account (PBA) claims. 12 warnings were issued to companies operating in this area, and one, Money Made Simple (UK) Ltd, had conditions imposed on their licence. This company is now subject to a large number of additional requirements regarding use of clients’ Letters of Authority. Four more companies in the financial services arena remain under investigation.

The MoJ issued specific guidance on PBA claims during the period. Issues covered in this guidance include:

• The need to understand the rules that applied at the time of the sale
• Obligations to investigate the benefits available under the PBA, and whether these benefits would have been of use to the client
• The need to submit client-specific claims, rather than generic claim letters
• A requirement to consider previous judgements from the Financial Ombudsman Service when assessing whether claims have a reasonable chance of succeeding

10 warnings were issued regarding the sending of nuisance calls and texts. It was during this three month period – even though the fact has just been made public – that the MoJ imposed its first ever fine on a claims management practitioner. Aurangzeb Iqbal, who traded as The Hearing Clinic, amongst other trading names, was fined £220,000 after making millions of unsolicited marketing calls to consumers – some of whom were registered with the Telephone Preference Service – advertising his company’s hearing loss claims services.

Another CMC had their licence varied on July 2 2015, just after the end of the reporting period. EMC Advisory Services Ltd is now subject to a series of additional requirements regarding its marketing calls, including the need to train staff as to their obligations, and to keep records of calls made.

Nine more companies remain under investigation over their conduct regarding marketing communications.

The bulletin also reveals that the MoJ has identified six direct marketing companies who may be conducting claims management business without authorisation.

26 CMCs offering personal injury claims services were warned during the quarter, and as many as 15 companies were identified who may be operating in this area without authorisation. The MoJ continues to co-operate with the Insurance Fraud Bureau and the Insurance Fraud Enforcement Department of the City of London Police to tackle personal injury fraud.

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.