The FCA and Competition and Markets Authority will work together to ensure effective competition for consumers using claim management companies.
Responsibilities of the Claims Management Regulator, which regulated companies providing claims management services to England and Wales, were passed on to the FCA on 1 April 2019.
The FCA and CMA have updated their cooperation agreement, which allows them to enforce updates to the regulatory framework for the claim managers, who help consumers seek compensation from finance companies.
In the updated “memorandum of understanding”, published yesterday, the FCA and CMA said they would work together to investigate cases of suspected anti-competition behaviour by CMCs.
As part of the FCA’s new remit over CMCs, the companies must meet and maintain a set of FCA standards, which also include directly pointing customers to the Financial Services Compensation Scheme and the Financial Ombudsman Service as available services.
The FCA also requires firms that obtain lead lists from the third parties to carry out due diligence on whether this data has been obtained legally and keep records of this.