The latest enforcement bulletin from the Claims Management Regulator at the Ministry of Justice (MOJ) shows that the Regulator is stepping up its supervision of firms. The MOJ visited 303 claims management companies (CMCs) between October and December 2016, having visited 487 in the previous two quarters combined.

The final quarter of 2016 saw the MOJ cancel the licences of 22 companies. It has now withdrawn authorisation from 102 companies since the start of the financial year in April.

14 new investigations started during the fourth quarter, almost as many as the 15 investigations commenced in the entire six-month period from April to September.

Regarding financial CMCs, the MOJ cancelled the authorisation of two companies during the quarter, and varied the authorisation of two more:

• Scarlet Marketing Services was prohibited for irregularities over fees, and for making misleading marketing calls that implied the company was connected with the Government
• JAS Financial Advisory was prohibited for, amongst other issues, failing to co-operate with the Legal Ombudsman. The Ombudsman was compelled to publish a statement regarding its concerns that the company was not refunding fees as promised, and was not investigating complaints correctly
• Theclaimteam.com had its licence varied for making misleading and high-pressure sales calls
• Thomson Legal had its licence varied over issues regarding fees and contracts

Six more financial CMCs were warned, investigations into 14 companies in this sector are ongoing and seven new investigations were started.

The only fine imposed by the MOJ during the fourth quarter of 2016 was to MG Financial, which was hit with a £3,000 penalty after it failed to ensure leads from third parties had been correctly obtained.

Six companies were warned regarding the sending of nuisance calls and texts, 12 investigations regarding this issue are ongoing and five new investigations were started.

In the personal injury claims arena, 16 companies were formally warned, and others were given advice regarding the referral fee ban that has now been in force for some time. The MOJ is working with the police and other agencies to try and tackle criminal activity amongst personal injury CMCs. The bulletin also highlights the MOJ’s concerns over the rise in holiday sickness claims – the regulator has previously said it is concerned that holiday sickness CMCs are approaching potential clients in person, or are failing to obtain consent before targeting individuals with direct marketing material.

The MOJ has also successfully prosecuted ACA Long Eaton Ltd and Adeel Karim for conducting claims management activity without authorisation, and both parties have now been fined by the courts. During the quarter, five companies were investigated due to suspicions they were conducting unauthorised activity, and 28 companies had their websites closed.

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.