Regulation

FCA secures fines against two claims management companies

The FCA took on regulatory responsibility for claims management companies in April 2019.

Rozi Jones
|
18th December 2019
FCA new
"The decision by the Tribunal to uphold the findings of the CMR is another important message to industry that firms must conduct all business with integrity"

The FCA has fined Professional Personal Claims (PPC) £70,000 for misleading consumers and banks in the first claims management company case closed by the regulator.

This decision follows the transfer of regulatory responsibility for claims management companies (CMCs) to the FCA on 1 April 2019.

PPC’s websites and printed materials prominently used the logos of five major banks which was liable to mislead consumers into believing they were submitting redress claims for mis-sold PPI directly to their banks, rather than engaging PPC as a CMC to pursue claims on their behalf in return for payment of a success fee.

The regulator found that PPC also failed to present accurate, fully formed, detailed and specific complaints to banks.

PPC appealed on 21 December 2018 to the First-tier Tribunal against its penalty notice. While the appeal was pending, the FCA took over regulation of CMCs from the Claims Management Regulator (CMR). In September, after reviewing the evidence put forward by the FCA, PPC withdrew its appeal and the FCA therefore imposed the £70,000 fine.

Additionally, the First-tier Tribunal has upheld a decision to fine Hall and Hanley £91,000 for data breaches and unauthorised copying of client signatures.

Hall and Hanley is a claims management company whose business focused on claims for mis-sold PPI.

The £91,000 fine was initially imposed by the CMR under the previous regulatory regime. In March 2019, the CMR found that H&H had breached rules requiring CMCs to take all reasonable steps to ensure that any referrals, leads or data purchased from third parties had been obtained in accordance with applicable laws. Marketing text messages concerning PPI claims were sent to consumers’ mobile telephone numbers, without H&H having taken sufficient steps to check that affected consumers had consented to receiving such messages.

In addition, when reviewing a sample of 16 of H&H’s client files, the CMR found that in 8 of the files clients’ signatures on claim documentation (including letters of authority) had been copied without authorisation.

The Tribunal upheld the CMR’s decision in its entirety.

Mark Steward, executive director of enforcement and market oversight at the FCA, said: "CMCs have an important role to play in helping to secure compensation for their customers. This is especially true in the case of those consumers who might not otherwise make a claim.

"PPC’s misleading website and marketing material suggested PPC was associated with the five banks when this was not the case. Claims management firms must ensure their advertising is accurate. Not only in terms of what they say about themselves and their services but also in terms of what is represented.'

"The failure by Hall and Hanley to take previous advice and warnings from the former claims management regulator and the firm’s repeated use of consumer data and customer signatures without their consent are clear examples of a firm falling short of the standards we expect.

"The decision by the Tribunal to uphold the findings of the CMR is another important message to industry that firms must conduct all business with integrity and due care, skill, and diligence."

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