The National Advice Clinic, based in Lancashire, which also trades as the Industrial Hearing Clinic or the Central Compensation Office, made nearly 6 million calls between October 2014 and April 2015 about noise induced hearing loss claims.
Many of those called were registered with the Telephone Preference Service (TPS) – which tells companies that they did not want to receive such calls. This resulted in almost 2000 complaints being received by Ofcom which is responsible for the TPS.
The Claims Management Regulator (CMR) regulates companies that offer to help people claim compensation for issues such as personal and criminal injury and mis-sold financial products. The government changed the law in December 2014 to give the CMR the power to impose financial penalties on companies who break the rules. This is the fourth and biggest fine issued so far, bringing the total collected to £1.6 million.
CMR head Kevin Rousell, said:
This company’s cold-calling campaign was deliberate and sustained, and a flagrant breach of our marketing requirements.
They showed an alarming disregard for the misery their tactics can cause, particularly to elderly and vulnerable people.
The size of this penalty demonstrates how seriously we take this issue - nuisance calls will not be tolerated.
The fine comes 6 weeks after the CMR issued another large penalty of £570,000 and demonstrates the substantial effort by the CMR to clean up the industry and drive out rogue practices. Since 2010 the regulator has removed the licences from over a thousand claims management companies (CMCs), including 300 last year.
Justice Minister Lord Faulks said:
Nuisance calls are a real scourge to households, and people have simply had enough.
I am pleased the regulator has imposed such a substantial fine for such blatant and shocking behaviour. This follows other large fines and the removal of over a thousand licenses from claims management companies since 2010.
The government is committed to protecting the public from this nuisance - that at best wastes people’s time and at worst causes significant distress.
Notes for editors
- The £850,000 fine issued to the National Advice Clinic is the highest financial penalty imposed by CMR, which is based at the Ministry of Justice.
More details of the fine can be read on the Justice website.
- The CMR gained the power to impose financial penalties in December 2014, and since issuing the first fine in July, the regulator has now issued 4 fines totalling £1.6 million.
- Since 2010 the regulator has removed the licences of over 1000 firms including 300 in the last financial year.
- Information about the Claims Management Regulation Unit including details of live investigations and enforcement action against companies.
- Explanation of the Financial Penalties scheme.
- The government has taken a number of steps in recent year to tackle rogue claims management companies including:
- Banning ‘referral fees’ paid between lawyers, insurers, claims firms and others for profitable claims – which have driven the growth of compensation culture.
- Banning claims management companies from offering cash incentives or gifts to people who bring them claims. ‘Recommend a friend’ deals also banned, along with contracts agreed only over the phone.
- Changing the law so that regulated claims companies which breach rules around cold-calling and client service will be liable for fines of hundreds of thousands of pounds (as well as the existing sanctions of being suspended or closed down).
- For further information please call the MOJ press office on 020 3334 3536. Follow us on Twitter @MoJGovUK.