The week commencing April 18 2016 saw the Claims Management Regulator at the Ministry of Justice announce its reasons for removing the authorisation of two more claims management companies. These are Stockport-based financial claims manager Debt Ace Limited, which traded as Taylor & Taylor, Verus Associates, Money Advice Centre and MAC; and Blackburn-based personal injury claims company Check Point Claims Limited.

Both companies were in breach of the following sections of the Conduct of Authorised Persons Rules:

• General Rule 2d – which requires companies to maintain appropriate records and audit trails
• General Rule 2e – which stipulates that referrals, leads and data obtained from third parties have been sourced in line with relevant regulations and laws
• General Rule 5 – which simply asks companies to observe all relevant laws and regulations

The additional rules which Debt Ace breached include:

• General Rule 8 – which requires companies to operate a complaints scheme that complies with the relevant rules
• Client Specific Rule 1a – which is the general requirement for companies to ‘act fairly and reasonably in dealings with all clients’
• Client Specific Rule 1c – which asks that information supplied to clients is ‘clear, transparent, fair and not misleading’
• Client Specific Rule 6d – which prevents companies from stating or suggesting that they are approved by the Government or are connected with a Government body
• Client Specific Rule 11 – which requires contracts between the company and its clients to be signed by the client, and prevents payments being taken before the contract is signed.
• Client Specific Rule 15 – which stipulates that companies must give clients 14 days after signing any agreement to cancel the agreement and receive a refund of all payments made

The rules with which Check Point failed to comply also include Client Specific Rule 4, which prevents cold calling in person and requires that all telephone, email, fax or text marketing complies with the Direct Marketing Association’s Code and related guidance.

The previous week, Llanelli-based financial claims manager Legal Collect Ltd was also prohibited, and again it was found to have breached General Rules 2d, 5 and 8; as well as Client Specific Rules 1c, 6d and 11. It also failed to comply with General Rule 1, which requires companies to display honesty and integrity when conducting business; and General Rule 3, which requires directors and senior management of claims companies to have the necessary competence and understand the legislation and regulations with which they must comply.

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.