Corporate report

Claims Management Regulator: enforcement actions January to March 2016

Updated 9 May 2016

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This publication is available at https://www.gov.uk/government/publications/claims-management-regulator-enforcement-actions-apr-2015-to-mar-2016/claims-management-regulator-enforcement-actions-january-to-march-2016

1. Live investigations and recent actions

The Claims Management Regulator (CMR) publishes updated information on recent enforcement actions and investigations.

2. Actions: January to March 2016

The regulator uses its powers to take action against authorised claims management companies (CMCs) and individuals who don’t meet the required standards.

Between January and March 2016, the regulator took the following action:

  • 13 investigations started
  • 1 licence cancelled
  • 84 warnings issued
  • 75 audits carried out
  • 299 visits conducted

3. PPI and other financial claims handling

The practices of some CMCs specialising in financial claims, particularly mis-sold payment protection insurance (PPI) and mis-sold packaged bank accounts (PBA), continue to concern consumers and the financial services industry. Priority is being given to the ongoing monitoring of CMCs who operate upfront fee models and CMCs that are linked to them.

The regulator took the following action during this quarter

  • Audited 36 CMCs and issued comprehensive written advice
  • Issued 16 warnings to CMCs
  • Continued investigations into 12 CMCs
  • Commenced 3 new investigations

4. Nuisance calls and texts

The number of unwanted marketing calls and spam text messages continues to be a serious concern for CMR and other regulators with primary responsibility in this area – the Information Commissioner’s Office (ICO) and Ofcom. The regulator is working closely with these organisations to identify and take action against those companies that break the rules.

The regulator took the following action during this quarter:

  • Cancelled the authorisation of Falcon & Pointer Ltd for making almost 40 million automated calls without prior consent, as well as taking up-front fees from consumers without affording them sufficient time to read the terms and conditions they were agreeing to.
  • Audited 33 CMCs engaged in direct marketing and issued comprehensive written advice
  • Warned 15 CMCs engaged in non-compliant direct marketing
  • Continued investigations into 9 CMCs
  • Commenced 3 new investigations for possible breaches of rules relating to nuisance calls and texts
  • Published new marketing and advertising guidance for CMCs
  • Continued to share information and work closely with the ICO to assist with investigations

5. Personal injury claims handling

Personal injury fraud remains a primary concern and a key area of action for the regulator. CMR works with the Insurance Fraud Bureau (IFB) and the City of London Police’s Insurance Fraud Enforcement Department (IFED) to disrupt criminal operations. During this quarter, the regulator continued to collect intelligence from different sources on CMCs involved in other fraudulent activities.

The regulator took the following action to tackle criminal activity:

  • Provided IFED with 2 statements in respect of criminal investigations.
  • Dealt with a number of referrals to the Government Agency Intelligence Network from a number of partners in respect of ongoing criminal investigations.
  • Engaged directly with partners from the insurance industry to share intelligence and now receive vishing data which is passed to the DMT for action.
  • Engaged with West Midlands Police in operations against organised crime groups (OCGs) and worked with West Yorkshire Police in respect of an OCG who were linked to a fatality from a staged accident.
  • Continued to work with the National Crime Agency Civil Recovery Team and IFED to combat an OCG located in the North West.
  • Assisted Derbyshire Constabulary with bringing charges against a business for trading without authorisation.

CMR continues to closely monitor CMCs’ compliance with the referral fee ban, which includes a programme of audits and visits. At the start of 2013, just before the ban came into effect, around 1,900 CMCs were operating in the personal injury market. This has since fallen to 868 CMCs at the end of March 2016.

CMR took the following action during this quarter to enforce the referral fee ban:

  • Audited 40 CMCs and issued advice notices
  • Issued 9 warnings to CMCs
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