Summary

• It is important for claims management companies to be regulated as strongly as currently regulated financial services firms are.
•  It is clear that consumers can suffer at the hands of a currently regulated firm and of a claims management company if the business in question, whatever sector, is deficient in senior management culture and accountability, TCF, conduct standards, customer communications, prudential stability etc.  Therefore, regulatory equivalence is long overdue and we welcome the FCA’s proposals to address the matter.
• To provide context, this response recounts our sector’s experiences in the early 2010s regarding bogus PPI complaints.
• We support all the key proposals in the CP, notably that claims management companies should be subject to FCA rules and principles relating to –
  • high-level standards
  • threshold conditions
  • systems and controls
  • general provisions
  • conduct of business
  • lead third-party generators
  • call recording
  • marketing
  • pre-contract and ongoing disclosure
  • collection of fees
  • supervision and reporting
  • prudential standards and wind-down procedures
  • client money
  • dispute resolution, and
  • enforcement.

Read the full response.