Corporate report

Claims Management Regulator: enforcement actions October to December 2015

Updated 9 May 2016

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1. Live investigations and recent actions

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

2. Actions: October to December 2015

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

Between October and December 2015, the regulator took the following action:

  • 33 investigations started
  • 8 licences cancelled
  • 4 financial penalty issued
  • 51 warnings issued
  • 82 audits carried out
  • 273 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.

The regulator took the following action during this quarter

  • Audited 33 CMCs and issued comprehensive written advice
  • Issued 11 warnings to CMCs
  • Continued investigations into 3 CMCs
  • Commenced 3 new investigations
  • Imposed a financial penalty of £570,000 on Rock Law Ltd and varied the conditions of its licence for using high pressure tactics to coerce hundreds of customers to make PPI claims

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:

  • Imposed a financial penalty of £91,845 on Complete Claim Solutions Ltd for making unsolicited calls about personal injury claims to customers registered on the Telephone Preference Service
  • Imposed a financial penalty of £850,000 on The National Advice Clinic for making millions of unsolicited calls about noise-induced hearing loss claims to customers registered on the Telephone Preference Service
  • 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. The firm’s authorisation was cancelled just outside the reporting period in January 2016.
  • Coordinated enforcement action and carried out joint audits of CMCs with the ICO as part as of a joint ‘week of action’ to tackle nuisance calls and texts
  • Audited 30 CMCs engaged in direct marketing and issued comprehensive written advice
  • Warned 11 CMCs engaged in direct marketing
  • Continued investigations into 6 CMCs for possible breaches of rules relating to nuisance calls and texts
  • 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:

  • Continued investigations into 2 CMCs
  • Provided statements to West Midlands Police and IFED 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

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, around 1,900 CMCs were operating in the personal injury market. This has since fallen to 917 CMCs at the end of December 2015.

CMR took the following action during this quarter:

  • Audited 45 CMCs and issued advice notices
  • Issued 12 warnings to CMCs
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