The Claims Management Regulator at the Ministry of Justice (MoJ) has released details of the wide ranging enforcement action it took against claims management companies (CMCs) between July and September 2015. The MoJ cancelled the licences of 59 companies during this period, issued 43 warnings and commenced 21 new investigations.

In the area of financial services claims, which includes payment protection insurance and packaged bank account (PBA) claims, 10 warnings were issued, three investigations were ongoing during the quarter and one new investigation commenced. Regarding nuisance calls and texts, 12 companies were warned, five investigations were ongoing and one new investigation commenced. An additional six warnings were handed to personal injury CMCs.

The MoJ also imposed a monetary penalty for the first time during the third quarter. In August, it fined The Hearing Clinic £220,000 for making large numbers of unsolicited calls regarding hearing loss compensation. Two further fines were imposed in October, just after the reporting period for this bulletin ended. Rock Law Limited was fined £570,000 for taking payments from clients without express permission being given, and for pressurising clients into accepting their terms and conditions. Then Complete Claim Solutions Limited received a fine of £91,845 for the calls it made promoting its personal injury compensation services.

Mention is also made in the quarterly round-up of the special bulletin the MoJ issued in July regarding PBA claims. CMCs were asked to comply with the following requirements in this area:

• Companies need to understand what rules applied regarding PBAs at the time the account was sold
• They must assess the benefits available under the PBA, whether these benefits would have been of use to the client at the time of the sale and which benefits the client has made use of
• Claimants should be made aware that a successful PBA claim may lead to the account being cancelled
• Client-specific claims, containing specific details of why the PBA is believed to be unsuitable for the client, should be submitted to banks, rather than simply sending generic claim letters
• Companies should look at previous FOS decisions when assessing whether a claim has a reasonable likelihood of success
• Subject Access Requests should not be routinely made when pursuing claims

In addition to its own enforcement work, the MoJ has also worked extensively with law enforcement agencies regarding personal injury claims issues. It made 15 referrals to the Government Agency Intelligence Network concerning ongoing criminal investigations, provided evidence in a criminal trial for alleged money laundering and insurance fraud allegations, and provided four statements to police forces to assist with criminal investigations. In addition, 31 companies were found to be operating in the personal injury arena without authorisation, and have been referred to the specialist MoJ team that investigates unauthorised activity.

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.