Claims Management Companies
Claims management companies (CMCs) offering to act for people who may have been mis-sold goods or services (e.g. PPI, packaged accounts, pensions), or who may have a legal claim for redress for loss or injury (e.g. holiday illness, injury or harassment at work) are regulated by the Financial Conduct Authority (FCA) as of 1 April 2019. All companies providing these services must be registered for ‘temporary permission’ by this date.
Claims management services includes lead generation (i.e. the identification and seeking out of potential claims, and their referral to others such as solicitors), as well as the provision of advice and legal representation in relation to a claim.
The FCA requires that all advertising is ‘clear, fair and not misleading’ and specifically that:
• Where there is any reference in advertising to the cost of a claim that will be referred to, say, a solicitor being on a ‘no win, no fee’ basis, the CMC must also set out details of their fee.
• Any advertising will have to show, where relevant, that there are statutory ombudsman or compensation schemes that the customer could use for free. Radiocentre Clearance will seek guidance from the FCA, as appropriate.
Radiocentre also require the following:
• Where there is any reference to the amount of compensation received by an individual, this should be the net figure after the deduction of any fees and costs. The figure given should represent the level of compensation received by at least 10% of claimants.
• CMCs claiming to be able to have credit card and/or other types of debt written off, where the debt was taken out before March 2007 and where the credit agreement may have been improperly drawn up, must include the following qualification: “If you have a loan/credit card taken out before April 2007, you may have a legal case for having the loan written off if the credit agreement wasn’t drawn up properly. Fees apply.”