The Claims Management Regulator at the Ministry of Justice (MoJ) has issued its enforcement bulletin for the period July 1 to September 30 2018. This is of course one of the last such bulletins that the MoJ will issue, as the Financial Conduct Authority (FCA) takes over as claims management regulator on April 1 2019. The bulletin actually makes no mention of the impending FCA handover and instead concentrates on the actions the MoJ has been taking against claims management companies (CMCs).

Between July and September 2018 the Regulator conducted 79 audits and 77 company visits. This resulted in it cancelling the licences of 29 CMCs and warning 43 more. Three more investigations commenced during the three-month period.

Although recent FCA data has suggested that more and more consumers are pursuing payment protection insurance (PPI) claims on a DIY basis, the bulletin still says that PPI is “the most active claims area in the financial claims sector.” As the end of its period as claims regulator ends, the MoJ says it continues to monitor PPI CMCs in areas such as: client acquisition and sales, client paperwork, claims processing, complaints handling and other processes and systems.

The regulator adds that it has seen no evidence so far of any CMCs breaching the recently introduced ban on the charging of upfront fees for PPI claims. However, it adds that it is also monitoring compliance with the new 20% fee cap, and specifically whether CMC’s contractual information and marketing material reflect this cap. Eight CMCs were identified for follow up work and one was issued with a formal warning.

On the subject of personal injury, holiday sickness and housing disrepair claims, the MoJ is focused on enforcing compliance with: the referral fee ban, rules on marketing and how CMCs engage with clients. The bulletin says that eight formal warnings have been issued as a result. Once again, the MoJ’s enforcement bulletin highlights “the identification of CMCs involved in suspected fraudulent and other criminal activity” in this claims arena.

Three more warnings were issued to CMCs regarding nuisance calls and texts. It was also in this area that the MoJ partially won an appeal made by a CMC against its enforcement action, although the level of fine was reduced. The punishment was imposed after the MoJ concluded that the company had made contact with 65 consumers who had registered with the Telephone Preference Service, and that the company was unable to demonstrate that it had received the necessary consent for those contacts.

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