A recent report by The Claims Management Regulation Unit (CMR), shows that the number of Claims Management companies (CMCs) operating under its remit in the UK, namely across personal injury and financial products has reduced by almost 25%. Conversely the CMR has increased its personnel by a third to more swiftly deal with issues of concern, with a particular emphasis being on the handling of PPI claims.
The Key CMR initiatives include:
A specialist compliance resource to focus on tackling non-compliant marketing practices, in particular lead generation.
An increase in enforcement action against non-compliant CMCs has increased. So far this has resulted in 160 CMCs being warned, suspended or cancelled and 64 audits conducted.
The banning of financial incentives offered to potential claimants and also fees passing between stakeholders involved in the bringing about of a claim, to curtail profiteering.
Penalised CMCs or those under investigation will be named to increase industry transparency.
Finally, a consultation to amend the Conduct of Authorised Persons Rules was announced. The consultation looked at further clarifying key terms to eradicate any potential grey areas, which could be exploited by non-compliant firms. Results from the consultation are due to be published this month. You can read more here.
- The “carrying out of investigations to establish the existence and/or merits of a claim”.
- “Being able to substantiate claims they are making”.
- “Not making claims recklessly, falsely or in a way intended to mislead”.
- “Ensuring that the data/leads/claims they receive from introducers/agents have been legally obtained and are compliant with the rules”.
Your claims management process must place appropriate emphasis on documenting data sources and mandating processes to be followed increases accountability. Change cannot happen in isolation and needs to be reinforced across the industry, however the claims management process also needs to reflect these values consistently.