The Financial Conduct Authority will be in direct regulation of all claims management companies once it passes its CMC regulation draft on 1 April 2019. According to FCA Chief Executive Andrew Bailey, the regulation will help “provide justice and redress” allowing CMCs to be “trustworthy providers of high-quality legal services.”
According to observers, CMCs are similar to “call centres with little regard for people they promise help through cold calls and text messages.” First4Lawyers Qamar Anwar supports the City watchdog’s industry regulation to improve the sector’s reputation and performance.
Numerous unscrupulous claims companies are to blame for the hundreds of thousands of cold calls and text messages received even by UK students who have yet to get financing. In the past, violating CMCs received fines and penalties accordingly.
The FCA’s proposals include the monitoring of CMC activity and limitations of responsibilities. An example involves the manner CMCs procure “lead lists.” These contain the names, possible financing, and contact details of the individual in question. Most agencies get their lists from unnamed sources the FCA considers possibly illegal.
PPI is the UK’s biggest financial scandal. It has accumulated over £40 billion in repayments for consumers with over £20 billion repaid to consumers so far.