Claims Management Companies (CMCs) have been sent a written warning from the Financial Conduct Authority (FCA) reminding them of their regulatory duties.
This comes after some CMCs have been accused of poor behaviour and obtaining personal information and data of adviser’s clients in a dishonest way. Indeed, some have even been accused of making up claims or gathering data with false names used.
If CMCs fail to comply with the rules, they will have their temporary FCA permissions taken away or have additional endorsement/requirements applied to them.
The FCA outlined several problems that have been reported when CMCs have been acting for their customers:
The FCA’s letter has reminded CMCs they will take all matters contained in the letter into account when they assess their application for full authorisation rather than the temporary authorisation that most CMCs hold today.
The reality is that financial advisers, solicitors and claims management companies are not allowed to “cold call” or make inaccurate claims in their advertising and promotions or indeed, not to act in a ‘fit and proper manner’. The question is how are CMCs getting hold of personal data? Why are they being allowed to continue trading if found to be dishonest. Why have they been allowed to continue to abuse the system for so long?