CMR bulletin 30
Updated 17 February 2017
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This edition includes information and advice on Holiday Sickness Claims, ASA rulings on advertising, Data Protection requirements when dealing with and collecting consumer’s personal information, and the use of Cookies when storing the public’s information.
Compliance Update
1. Holiday Sickness Claims
We are aware of an increase in CMC advertising targeted at individuals who have been ill on holiday. Direct telemarketing and approaching potential clients in person is being used.
A number of potential breaches in respect of holiday sickness claims have been identified. All such claims fall under the definition of personal injury and are therefore deemed to be regulated claims management services. If advertising for, referring or progressing these type of claims, the CMC involved must be authorised and comply fully with the Conduct of Authorised Persons Rules 2014 (CAPR) and relevant legislation.
Any data used for direct marketing must have received consent from clients that they are happy to be contacted, specifically about a holiday sickness or personal injury claim. Simple data about people that have been on holiday will be insufficient and will therefore breach the CAPR. Please refer to the Marketing and Advertising guidance to ensure you are not in breach.
You are also reminded that if you are operating in the holiday sickness claims market you must inform the regulator of any changes that may affect your authorisation such as new websites or trading names.
The regulator is liaising with ABTA and other industry stakeholders to identify the most appropriate and effective regulatory action. We are currently investigating a number of businesses who are trading in holiday sickness claims without authorisation.
2. ASA Adjudications
You should be reviewing your advertising and marketing in light of two recent rulings made by the Advertising Standards Agency (ASA) to ensure that it complies with the CAP Code (Edition 12) (the Code). The ASA has recently issued adjudications against two CMCs whose advertising was deemed misleading, in breach of the CAP Code; specifically rules 3.1 (Misleading advertising), 3.7 (Substantiation) and 3.11 (Exaggeration). The misleading elements of the advertisements were the ‘average amount’ claimed back and a specific amount of redress mentioned in a testimonial.
When referring to average claim amounts you should ensure that it is clear to clients how you have calculated those amounts, for example clarifying that these are successful claims and whether these are individual claims or multiple claims. It should be clear when referencing claim values whether this takes into account deductions including your fee. In relation to using specific redress amounts in testimonials, the ASA concluded:
“While we acknowledged that the amounts quoted were the total amounts refunded to the customers by the banks, it was not the amount eventually received by the customers. We considered the omission of the fee and the impact it had on the amount that was to be refunded created the impression that consumers would receive and benefit from the total amount quoted in the ads. Because that was not the case, we concluded they were misleading.” Read the full ASA ruling here.
These decisions represent the ASA’s interpretation of the CAP Code. Compliance of the CAP Code is part of the Conduct of Authorised Persons Rules 2014 (CAPR); Client Specific Rule 2 - ‘All advertising, marketing and other soliciting of business must conform to the relevant code – The UK Code of Non-broadcast Advertising, Sales Promotion and Direct Marketing (CAP Code); or The UK Code of Broadcast Advertising (BCAP Code).’
Failure to comply with the advertising codes, including taking into account relevant adjudications, is therefore a breach of the CAPR rules which may result in you being investigated and/or subject to enforcement action.
All ASA adjudications for the last five years can be viewed here. If you are unsure as to whether your adverts comply with the CAP Code, please contact the ASA for advice in the first instance.
3. Privacy Policies
General Rule 15 of the CAPR requires you to comply with obligations imposed by the Data Protection Act 1998. This includes ensuring data is processed fairly and lawfully
If you collect personal information on your website (for example via a ‘webform’) you must ensure that consumers are advised about the data you are collecting and how it will be used. This is often relayed to consumers via a privacy notice.
The Information Commissioner’s Office (ICO) has published its new Privacy Notices Code of Practice to help organisations better explain how they use personal data.
Their code contains practical advice and examples around what should be included in a privacy notice, how and when information should be delivered to individuals, and tips on how to write a notice. It also includes a checklist, so organisations can see at-a-glance what action to take to comply with the law. The code also gives advice on obtaining consent.
We recommend all authorised businesses register to receive updates from the ICO in order to stay up to date with the current data protection laws and the upcoming General Data Protection Regulations.
4. Cookies
Regulation 6 of The Privacy and Electronic Communications Regulations (2003) define what is expected of an individual that stores information on a user’s terminal.
Cookies are small files stored on the users terminal, the information stored in these can vary from preferences to page views.
The ICO issued guidance on cookies which is quite clear in that it states if you use cookies you must:
- tell people the cookies are there;
- explain what the cookies are doing and why; and
- get the person’s consent to store a cookie on their device.
General Rule 5 of CAPR states a business shall observe all laws and regulations relevant to its business. If you operate a website and use cookies you must ensure the guidelines above are met.
The ICO has recently published data in relation to cookies and the actions they have taken. It is important that you follow the guidance provided and ensure that you are acting in a compliant manner under CMR rules.
5. Changes to Business Activities
You are reminded it is a requirement of your authorisation to inform us of any changes to your business activities within 20 working days. This includes operating in new sectors, new claims areas in your current sectors, any new trading names or marketing methods. If you are unsure whether your new business activity is deemed to be regulated claims management activity, please contact us.
Other CMR News/Updates
6. 2017-18 CMR Application and Annual Regulation Fees
A consultation paper on the proposed levels for application and annual regulation fees levied on CMCs for the 2017-18 regulation year is currently open and closes on 16 December 2016.
7. Recent Enforcement Action
Read our latest report summarising the action taken against CMCs in breach of the rules.