Two claims firms suspected of making thousands of nuisance calls and ripping off hundreds of vulnerable people have had their offices raided by the Claims Management Regulation Unit (CMRU).
In a week of targeted enforcement action, investigators teamed up with police to raid and make arrests in connection with 2 businesses thought to be at the centre of large scale and sophisticated cold-calling operations.
Police arrested 5 people after a raid on a Swansea company which had been operating illegally without a licence. The company is believed to have conned the public out of hundreds of thousands of pounds through misleading marketing calls – taking one-off payments in excess of £500 from vulnerable consumers.
CMRU officers later worked with police to raid a company in central Birmingham which bombarded people with hundreds of calls a day about claims for payment protection insurance. The firm is believed to be linked to numerous other businesses operating in a network of unlicensed claims companies.
In these raids officers seized computer equipment and documents for further investigation. Those arrested have been released on conditional bail pending further investigation into criminal charges.
The raids and arrests are the latest moves to clean up the claims industry by the CMRU, which regulates companies that offer to help people claim compensation for issues such as personal injury and mis-sold financial products.
Kevin Rousell, Head of Claims Management Regulation, said:
We have taken swift and decisive action to tackle these sham firms. Our intelligence suggested that these people wanted to defraud the public and cause misery.
Firms should be in no doubt that if you attempt to operate outside the law and take advantage of vulnerable people - we will seek the most severe sanctions available.
The industry regulator has today also announced that it has fined a company £315,000 for serious breaches of its rules of conduct. Elkador Finance Ltd, based in Bournemouth, failed to prove claimant data was legally obtained, despite clear requirements set by the regulator. The fine brings the total of penalties issued by the CMRU to more than £2million.
Note for Editors
- The arrests related to the Swansea business took place on 19 of April and the Birmingham raid took place a week later on the 26 April.
- This action is the latest in a series of moves to rid the industry of rogue behaviour, which has included issuing fines of over £2 million and removing the licences of over a thousand firms since 2010.
- Since 2007 all companies offering claims management services have to be registered and licensed with the CMRU.
- The claims management company Elkador Finance Limited will be fined £315,000 following an investigation which started on 20 May 2015. The fine will be issued against Elkador Finance Limited for failing to conduct due diligence on the leads accepted from third parties and the lack of control over the marketing activities of those third parties. The business can appeal the fine, and they have 28 days to make their representations to the First Tier Tribunal.
- Further information is available on the Claims Regulation website.