The February 2016 bulletin from the Claims Management Regulator at the Ministry of Justice (MoJ) is extremely wide ranging, and claims management companies (CMCs) need to read it carefully.

Firstly, reference is made to three major enforcement actions taken by the MoJ recently:

• Falcon & Pointer Ltd had their authorisation cancelled after making 40 million nuisance calls
• The National Advice Clinic received a record fine of £850,000 for its six million unsolicited calls
• It has executed a warrant on a CMC suspected to be operating without authorisation

Next, companies are warned that under General Rule 2(a) and Client Specific Rule 1(b) of the Conduct of Authorised Persons Rules, they are required to conduct a comprehensive fact find on their customers before submitting a claim. This requirement applies to the original claim made to the firm involved, as well as to referrals to the Financial Ombudsman Service (FOS).

CMCs are reminded of the new complaints rules introduced under the Alternative Dispute Resolution, and that firms are required to give their consent to the FOS handling complaints that are referred to them outside the usual timescales.

Companies are then asked to note a number of issues relating to the Financial Services Compensation Scheme (FSCS). These include:

• Claims are not actually made against the FSCS – instead the Scheme settles claims against firms that are insolvent
• Unless the firm actually is insolvent, customers should follow the usual process of complaining to the firm and then to the FOS if necessary
• Limits apply to FOS compensation, and customers may not receive compensation for the full value of their loss

CMCs must provide customers with the required pre-contractual information “in good time before the conclusion of the contract”. The bulletin suggests that 24 hours would be a reasonable period for a customer to consider the information. The bulletin also highlights that not allowing customers sufficient time to consider the information was one of the reasons enforcement action was taken against Falcon & Pointer (see above) and against Rock Law Ltd.

The bulletin once again reminds customers that they cannot make unsolicited marketing calls to individuals registered with the Telephone Preference Service (TPS), and cannot make any automated calls or send any marketing texts unless the recipients have consented in advance to receiving them. If customers did previously give consent for a CMC to over-ride the TPS requirements, or consented to receiving automated calls or texts, then the bulletin says that companies should only rely on this consent if it was given in the last six months. Companies authorised by the MoJ are also required to keep comprehensive records to evidence who has given consent.

The regulator has confirmed that annual regulation fee and application fees for CMCs will remain unchanged for the 2016/17 financial year.

Finally, companies are invited to attend two training courses on complaints handling being organised by the Legal Ombudsman. The bulletin on the MoJ’s claims management regulation website contains links to allow companies to book their places.

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.