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FCA: Claims management regulation will boost industry-wide professionalism

Close up Businessman hand holding pen and pointing at financial paperwork with financial network diagram.The financial watchdog will begin regulating claims management companies from today in a bid to boost professionalism across the sector.

Over 900 CMCs have registered for temporary permission while they go through the FCA authorisation process.

CMCs will now need to meet and maintain a set of FCA standards.

This follows a 2016 independent review into regulation within the claims management sector.

The new standards including directly pointing customers to the Financial Services Compensation Scheme and the Financial Ombudsman Service as available services.

CMCs must also provide due diligence on lead generation and rules to prevent firms encouraging customers to make fraudulent or frivolous claims.

The FCA’s continued focus on transparency of fees across various sectors in the industry will also come into play.

To meet minimum standards, claims management firms will need to prove they have been upfront with fees and charges and breakdown services they provide and the correlation to price.

Telephone calls with customers must also be recorded and retained for a year after final contact in a bid to quash pressure sales techniques.

FCA executive director of supervision, retail and authorisations Jonathan Davidson says: “The new regime has consumer protection and CMC professionalism at its heart. It will mean that customers will be protected from claims management cowboys and get a better deal.

“Many CMCs play an important role in helping to secure compensation for customers, including for those who otherwise might not make a claim.”

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There are 2 comments at the moment, we would love to hear your opinion too.

  1. Well not surprised ..

    One income stream is about to fall so best get a back up plan in situ quick smart

    With a salary bill averaging out at £101,000 per head (and climbing) the CMC.s better have deeper pockets than us

  2. On Saturday (just before the deadline) I received an unsolicited but official-looking mailing from the Consumer Refund Service (based in Gosforth, Newcastle-Upon-Tyne) headed Notification of Potential Refund of £3,219 (for mis-sold PPI).

    Firstly, I thought unsolicited mailings had been outlawed many months ago, secondly I’ve not been mis-sold PPI, thirdly there’s no mention of charges and fourthly no mention of the fact that, even if I do consider that I’ve been mis-sold, I could complain direct, free of charge with, if necessary, recourse to the FOS and the FSCS.

    Perhaps I should report this mailshot to the ICO.

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