05May

The Claims Management Regulator at the Ministry of Justice (MoJ) may not have cancelled the licences of any claims management companies (CMCs) during the first quarter of 2017, but there is still plenty to report in the regulator’s enforcement bulletin.

The MoJ cancelled the licences of some 69 CMCs in the 12 months to March 31 2017, but all of these actions were taken between April and December 2016.

However, of the seven fines imposed on CMCs during the year, three were levied between January and March. These were:

• A £553,000 fine for Help Your Claim Limited for serious breaches of the rules regarding high pressure sales tactics, misleading statements and handling of consumer contact details
• A £68,000 penalty for Zebra Claims Limited for failings regarding due diligence and record keeping
• A £10,000 sanction for Stevenson Drake Limited, who were found to have made unsolicited marketing calls

The MoJ has issued the following statistics regarding its enforcement actions during the past 12 months:

January to March 2017Total since April 2016
Investigations started into authorised CMCs1443
Investigations started into unauthorised CMCs632
Licences cancelled069
Financial penalties issued37
Warnings issued58196
Audits conducted92369
Visits conducted152942

Delving deeper into these figures, the bulletin later reveals that:

• 141 of the 152 visits and 49 of the 92 formal audits during the last quarter were to CMCs that handle personal injury claims
• 22 investigations are in progress regarding CMCs suspected of making illegal nuisance marketing communications
• Nine websites of CMCs who were operating without authorisation were shut down

A common theme of the MoJ’s quarterly enforcement bulletin is the way that the regulator has worked with other authorities in its bid to stamp out malpractice amongst CMCs. Examples given include:

• Co-operation with the Insolvency Service, who disqualified Christopher White from acting as a director for nine years. His CMC, Rock Law Limited, forced clients to enter into contracts during the initial sales call, before they had been given time to consider the documentation; and failed to adequately monitor the company’s sales agents
• Working with organisations such as the National Crime Agency, Information Commissioner’s Office (ICO), Insurance Fraud Bureau (IFB) and West Midlands Police to tackle organised crime groups operating in the personal injury arena
• Assisting the IFB and Kent Police to prosecute a ‘crash for cash’ fraudster, who was subsequently sentenced to seven years in prison
• Working closely with the ICO, Ofcom and the Advertising Standards Authority in investigating nuisance calls and texts made by CMCs
• Regarding the rise in holiday sickness claims, the MoJ has met with the Association of British Travel Agents, and shared information with both the Solicitors Regulation Authority and the Foreign Office

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.