The Ministry of Justice has warned it will take action against claim management companies that are misleading providers of merchant facilities about the nature of their business.
Merchant facilities allow companies to process credit card and debit card payments face to face, by telephone or online. Some providers are hesitant to supply services to claims management companies due to the number of failures in the sector.
The MoJ, which regulates the claims management sector, has warned that some claim management companies are securing the facilities under false pretences or using third parties to obtain the facilities on their behalf.
In its latest claim management regulation bulletin, the MoJ says: “We are aware that a number of authorised businesses have sought to obtain merchant facilities by misleading the provider about the nature of their business or otherwise using a third party to procure the facility in order to process payments for claims management services.”
The MoJ says this would be in breach of provider agreements.
It adds: “Businesses are reminded that it is a condition of authorisation that they cond- uct themselves with honesty and integrity. We will take app- ropriate action against businesses we deem to be breaching these rules.”
Claims firm Brunel Franklin managing director Sally Bowyer says: “We are proud of the professionalism of our business and are disappointed that all CMCs do not appear to operate to the same levels of professionalism and integrity.”