The City watchdog has promised to put to light the unfair practices of some claims management practices and to enforce tighter rules in the industry that has made billions over the banking industry’s mis-selling of payment protection insurance policies.
In its published draft of CMC regulation, which it intends to pass on April 1, 2018, Chief Executive Andrew Bailey stated that CMCs are necessary to help provide justice and provide redress. The FCA designed the rules in a way that will root out poor conduct and make CMCs “trusted provides of high-quality, good-value services.”
Part of its new implementations talk of legitimate procurement of “lead lists,” which CMCs use to obtain a consumer’s name, and having to state the alternatives to claims services, such as the Financial Ombudsman in their marketing and pre-contract disclosures.
According to First4Lawyers’ Qamar Anwar, the tighter CMC regulation is a great step towards improving the sector’s reputation and performance. He believes the new rules will help the consumer navigate an “alien industry at a difficult time.” Anwar adds that CMCs will not be seen as “call centres with little regard for the well-being of those they’re trying to contact through cold calls and text messages.”