CFA members regularly report issues with Claims Management Companies (CMCs) apparently failing to comply with the relevant rules for their sector. Here Helen McCarthy, Head of Policy at the CFA, shares some tips on how to report any poor practice that you experience.
The proportion of complaints coming from CMCs is increasing across the HCSTC market. As a result, lenders are seeing instances of poor practice as some CMCs try and process a large number of claims in a short space of time. We’ve seen examples of claims where customers haven’t even had a loan in the first place or incomplete forms being submitted to lenders, without enough information for the lender to investigate.
Regulators want to take action against poor practice but they need to know what it is and where it is happening. Reporting poor practice will help regulators identify and tackle these behaviours.
Currently CMCs can be regulated by either the Claims Management Regulator (CMR) or the Solicitors Regulation Authority (SRA). The CMC website and/or any communication from the CMC should tell you who they are regulated by. You can also check a firm’s registration with the CMR or the SRA.
Reporting a CMC
If the CMC is regulated by the CMR, the CMR provides a form to report poor conduct by CMCs: https://www.gov.uk/complain-about-claims-company
The form can be emailed or posted to the CMR. It is helpful to provide as much as evidence as you can when you report a CMC to the regulator. If you provide your contact details with the report, you may well also be contacted for more information.
CMCs are required to follow conduct rules. The CMR also provides guidance for CMCs on the rules. Key elements of the rules include:
- taking reasonable steps to investigate the existence and merits of a potential claim before presenting it to a third party – the regulator expects that whatever can be done to investigate a claim should be done, providing evidence to substantiate the claim – the CMC must always hold evidence to back-up the claim; and
ensuring that third party leads and referrals have been obtained in accordance with all the relevant legislation and rules, such as the Data Protection Act and the Privacy and Electronic Communications Regulations.
If the CMC is regulated by the SRA, the SRA also provides guidance on its website about how to report a firm to the SRA: https://www.sra.org.uk/consumers/problems/report-solicitor.page
The website provides a form to make the report. The SRA advises that the report should – set out the concerns clearly, identify any specific individuals and attach any evidence you have. The report should be sent to the SRA reports team (postal, telephone and email contact details are provided on the website). A firm should be reported to the SRA if it has breached an SRA principle. More details can be found on the SRA website: http://www.sra.org.uk/solicitors/handbook/handbookprinciples/content.page
If you have experience of CMCs not following these rules, you have grounds to report the CMC. By using these official channels to demonstrate poor practice, lenders can continue to demonstrate the areas that need to be addressed by these two regulators.