The Claims Management Regulator at the Ministry of Justice (MoJ) was once again busy in the second quarter – April to June 2016 – as it visited 242 claims management companies (CMCs) and conducted 74 formal audits.

This monitoring activity led to 11 formal investigations commencing, six companies having their licence cancelled and 45 more being warned during the period.

Once again the MoJ divides its report into three categories: PPI and other financial claims handling, nuisance calls and texts and personal injury claims handling.

Financial CMCs, including those that specialise in payment protection insurance claims, continue to concern the MoJ, and companies in this sector that charge upfront fees have been warned to expect particularly close scrutiny.

22 financial CMCs were audited during the three month period, and investigations continued into eight firms operating in this area. Two financial CMCs had their authorisation cancelled, one for “serious breaches in relation to due diligence and the handling of a vulnerable customer”, and the other for “breaches in relation to telemarketing and taking up-front fees.” The MoJ also worked with law enforcement agencies regarding the activities of three financial CMCs.

A great deal of action has been taken in recent months against companies who send nuisance texts and make nuisance calls. 36 CMCs who conduct direct marketing activity have been audited, 16 warned and 11 formally investigated.

Check Point Claims Limited lost its authorisation during the second quarter for, amongst other things, failing to ensure that recipients of automated telephone calls had given explicit consent to receiving them.

Elkador Finance was fined £315,000 for failing to demonstrate that the personal data of people who received marketing calls from the company had been legally obtained.

Just after the end of the second quarter, in July 2016, the MoJ fined UKMS Money Solutions Limited £50,000 after it sent 1.3 million unsolicited spam texts, and cancelled the authorisation of Reactiv Media Limited. One of the issues with Reactiv was that it made hundreds of calls to individuals who had registered with the Telephone Preference Service.

The regulator’s second quarter enforcement bulletin also contains a link to the extensive marketing guidance it issued to companies on April 1, and all CMCs are urged to read this guidance and ensure that they are compliant. It contains the usual reminder to firms about when live calls and automated calls can be made, and when marketing texts can be sent, but also addresses issues such as:

• When the term ‘no win no fee’ can be used, e.g. the use of the term must be qualified if a cancellation fee would be payable
• What is classed as ‘misleading marketing’, e.g. stating the company is a law firm when it is not, and stating or implying that a set amount of compensation is available
• How firms should state their regulatory status on websites and marketing material

The MoJ works closely with the Information Commisioner’s Office, Ofcom and the Advertising Standards Authority in its fight against nuisance calls and texts.

54 personal injury CMCs were audited and seven were warned during the second quarter. The MoJ also provided information to several police forces regarding the actions of companies operating in this area.

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.