The Claims Management Regulator at the Ministry of Justice (MoJ) imposed two fines on claims management companies in the space of four days during the first half of March 2017.

Firstly, Stevenson Drake Ltd (which trades as Refund My Bank Charges, Right Solicitor, Help Me Out, Pension Claimline, pbaclaimex.com and Start Claiming Today) was fined £10,000, then Help Your Claim Limited (which trades as HYC) was ordered to pay a much larger sum of £533,000.

As with many recent MoJ enforcement cases, both companies breached the rules relating to marketing practices.

Stevenson Drake, based in Northwich, Cheshire, failed to comply with General Rule 2e of the Conduct of Authorised Persons Rules 2014, which requires CMCs to take reasonable steps to confirm that any referrals, leads or data obtained from third parties were sourced in accordance with the requirements of applicable legislation and rules.

Manchester-based Help Your Claim breached Client Specific Rule 4, which forbids cold calling in person and asks that any marketing by telephone, email, fax or text complies with the Direct Marketing Association’s Code and any related guidance issued by the Association.

It can be reasonably assumed that Help Your Claim’s failings were relatively serious, as the company has been fined such a large sum for breaching just four sections of the rules. The other sections of the Conduct of Authorised Persons Rules that it failed to satisfy were:

• Client Specific Rule 1c – the requirement that all information provided to a client is clear, transparent, fair and not misleading
• Client Specific Rule 3 – the prohibition on engaging in high pressure selling
• Client Specific Rule 17a – the requirement to inform a client who is pursuing a claim that they must carefully read their claims documentation, and retain this paperwork

Stevenson Drake also breached these requirements:

• General Rule 2d – the need to maintain appropriate audit trails and records
• Client Specific Rule 8 –the stipulation that any CMC introducing business to a solicitor must not act in a way that leads the solicitor to breach their own regulatory rulebooks

Stevenson Drake handles personal injury claims, criminal injuries compensation and claims regarding mis-selling of various financial products; while Help Your Claim handles only payment protection insurance claims.

The MoJ has repeatedly reminded firms of their obligations. Issues that have led to fines and withdrawals of authorisation for many CMCs include:

• Making live marketing calls to individuals registered with the Telephone Preference Service
• Making automated marketing calls and/or sending marketing texts to individuals who had not given explicit prior consent to receiving them
• Relying on the assurances of third party data providers that all individuals on a marketing list had consented to be contacted, without taking steps to verify this
• Engaging in high pressure selling
• Failing to maintain adequate records of their business activities

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.