The FCA has opened a register for claim management companies. The CMCs have until end of March to register with the regulator to be able to operate within a temporary period before being fully authorized by the FCA.
The FCA has been tasked with overlooking the CMCs, replacing the Claim Management Regulator. Registering requires CMCs to fulfill the FCA’s “minimum standards” and makes them subject to the regulator’s action should the company fail to comply.
Within these standards, the City watchdog asks CMCs to disclose their fees upfront, as well as to disclose that there might be free alternatives such as the Financial Ombudsman Service, in marketing material and pre-contract disclosures.
Apart from that, the FCA requires firms who obtain so-called lead lists from the third parties to carry out due diligence on whether this data has been obtained legally and keep records of this.
Upon registering, the firms will have to apply for authorisation between April and end of July.