Industry calls for tougher CMC regulation ahead of Commons debate

The Financial Guidance and Claims Bill, which looks at CMC regulation, will be debated for the final time in the House of Commons on Monday.

Rob Cummings, assistant director, head of motor and liability at the Association of British Insurers, told Post: “Tougher regulation of claims management companies cannot come soon enough, and this bill includes the necessary provisions to transfer that oversight to the FCA where it belongs.

“Disreputable firms fuel a compensation culture that contributes to higher insurance costs for many. We’re confident a tougher regulatory regime under the FCA will be more effective at shutting down the bad apples, will stop consumers being plagued with nuisance calls and will help ensure claimants are given more transparent information about fees and charges.

“These measures are also an important part of ensuring the success of the government’s wider efforts to tackle bad practice in the personal injury claims market, including changes to the Civil Liability Bill and the proposed increase in the Small Claims track limit.”

Ban on cold calling

Last year, the Tories pledged to consider a ban on cold calling for personal injury claims in its election manifesto.

The Bill proposes a cap on CMC fees and the regulatory responsibility transferred from the Ministry of Justice to the Financial Conduct Authority.

Donna Scully, director at Carpenters, told Post that the Bill does not go far enough: “A comprehensive ban on cold-calling would have been preferable to a regime which has potential loopholes around “consent”.

“Realistically, how many people positively consent to be cold-called? My other concern with the Bill as it stands is that the ban is focused on financial products such as pensions, rather than PI claims.

“Given that MoJ is no longer responsible for this area, this is to be expected, but I would like Ministers to give a commitment in the Commons that the powers will be used to crack down on the millions of cold-calls from PI CMCs which have blighted the sector for too long.”

‘Dithering’

The Association of Personal Injury Lawyers shared Scully’s position, urging the government to “stop dithering” and ban cold calling for personal injury claims.

Brett Dixon, president of Apil, said: “There is a clear public demand for a ban on cold calling, yet the government has rowed back on its commitment to stop this epidemic which bedevils people across this country.

“Its proposal to control cold calling by changing the rules on consent will do nothing to stop unscrupulous marketing organisations from taking advantage of vulnerable people.

“The government is willing to ban cold calling in other areas, such as pensions, so its reluctance to do the same for personal injury is incomprehensible.”

In December 2016, Post launched the #ColdCallCrackdown campaign, which called on the industry to encourage staff to report nuisance calls. The campaign was endorsed by the Information Commissioner’s Office.

Kevin Rousell, head of the Claims Management Unit, The Ministry of Justice will be presenting a session “Claims management company regulation: Paving the way to the FCA handover” at the next Claims Club meeting in May. For more information and to sign up click here.