30Nov

The November 2016 bulletin for claims management companies (CMCs) from the Claims Management Regulator at the Ministry of Justice (MoJ) contains reminders of issues covered in previous bulletins, but also addresses some new topics.

Something certainly being mentioned for the first time is the issue of holiday sickness claims. The regulator uses its November bulletin to highlight that assisting with claims from people who have become ill whilst on holiday is an activity that requires authorisation. Once authorised, companies conducting this type of claims activity are subject to the same rules as all other CMCs. The regulator is particularly concerned that holiday sickness claims companies are approaching potential clients in person, or are failing to obtain consent before targeting individuals with direct marketing material. These practices constitute a breach of the MoJ’s rules. According to the bulletin, some companies are simply randomly contacting people who have recently been on holiday. Holiday sickness claims companies are also reminded that they need to inform the MoJ of any new trading names or website addresses they use. The MoJ says it is working with the Association of British Travel Agents to tackle unauthorised claims activity in this area.

CMCs are also alerted to two recent judgements by the Advertising Standards Authority. The first said that when a CMC quotes in its marketing material an average amount claimed back, it must include unsuccessful cases as well as successful ones. For example, if five clients succeed in claiming £2,000 but five more are unsuccessful, then the average claim amount must be quoted as £1,000, not £2,000.

Secondly, CMC Claim4you Ltd, trading as Free PPI Check, was censured for quoting figures for amounts claimed that did not reflect the actual amount received by the clients. The amounts quoted were the sums of compensation granted by the banks, but did not take account of the 25% share of the payout claimed by the CMC.

CMCs are then asked to take note of the new Privacy Notice Code of Practice, issued by the Information Commissioner’s Office (ICO). The example given in the MoJ bulletin asks that companies ensure clients know for what purposes information collected via the company website could be used for.

The next section of the bulletin also addresses an issue that is concerning the ICO, the data protection watchdog. Companies that collect information via cookies must ensure that they: inform people of the existence of the cookies, explain their purpose, and obtain the permission of the relevant individual to store a cookie on their device.

CMCs are advised to sign up for information updates from the ICO
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Finally, companies were reminded that they need to inform the MoJ within 20 working days should there be any changes to their business activities. The circumstances in which a notification is required include: taking on work in a new sector, using a new trading name, and adopting new marketing methods.

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.