The Ministry of Justice has published guidance aimed at claims management companies (CMCs) covering a range of aspects of claim handling. The guidance is divided into two documents: theCMR bulletin 29 and the Claims Management Regulator – misleading marketing statement guidance document.

CMR bulletin 29 highlights the following:  

  • A reminder of the rules for telemarketing and gaining consent from customers who are registered on the Telephone Preference Service, and the fact that ‘consent’ has a specific meaning and in order for it to be valid, it must be specific, informed and freely given by the consumer. CMCs are also reminded of the Privacy and Electronic Communications Regulations which also have further specific requirements in relation to consent.
  • A reminder of the Statement of Principles for letters of authority in PPI cases, which came into effect as of 1 July 2016.
  • A reminder that firms should not make misleading statements about compliance with other regulators’ codes which would imply that they are approved or connected to them, such as the Solicitors Regulation Authority.
  • A reminder of the open letter to CMCs  from the Financial Ombudsman Service (FOS) and reference to Principle 2 of the conduct rules. An additional reminder of FOS’ expectation that allegations made to customers by any firm covered by its jurisdiction must be accurate, specific and individual to the client, taking into account advice and guidance gained from past experience with the FOS. Seeking a final decision without having a clear and specific reason for disagreeing with the FOS’ initial assessment may be deemed a breach of the conduct rules.
  • Guidance from the Legal Ombudsman on customer complaints.

The guidance document on misleading statements sets out examples of the type of statements from CMCs which the CMR would deem misleading. These include: 

  • Implying that a consumer will definitely receive compensation without the necessity of proving that the product was mis-sold.
  • Misrepresenting the length of time a PPI claim can take and/or imply that there is a time limit to submit a claim.
  • Misrepresenting the size and experience of the business.
  • Misrepresenting the services provided by the business when the claim is actually passed to a solicitor.
  • Suggesting that the claim process is more difficult than it really is.
  • Giving misleading information about the amount of redress a consumer is entitled to and/or the business’s success rate.
  • Misrepresenting the fees payable by consumers or implying that the service is free when it is not.