The Claims Management Regulator (CMR) has stepped up its focus on businesses operating without authorisation, particularly those in the holiday sickness market, after receiving more than 200 complaints in just three months.
It prosecuted one company earlier this month, resulting in a £40,000 fine.
The quarterly update on the CMR’s enforcement actions said it was building further capacity to deal with unauthorised trading.
“CMR is working with partner agencies to improve intelligence gathering and detection, and take appropriate action on a risk assessed basis. The regulator is also focused on tackling the unauthorised elements of the holiday sickness claims market.”
In received 205 notifications of businesses trading without authorisation in the three months to September, leading to 40 letters of warning, the launch of two formal investigations and the removal of four businesses’ websites.
“Just outside the quarterly reporting period, CMR prosecuted My Life Adviser Ltd on 2 October 2017 for conducting regulated claims management services without authorisation. The company was fined £40,000 for 8 offences under the Compensation Act 2006 and ordered to pay over £40,000 in costs and a victim surcharge of £170.”
The CMR said it identified 35 unauthorised businesses operating in the holiday sickness sector, 13 of which have now ceased trading, and has removed the websites of seven claims management companies (CMCs) identified as operating illegally.
The regulator also continued to be busy with nuisance calls and texts, issued 11 warnings to CMCs engaged in “non-compliant direct marketing”.
Further, it fined Stockport CMC Bluestoneclaims Ltd £52,000 for making unsolicited telemarketing calls to individuals registered on the Telephone Preference Service without sufficient consent, and conducting insufficient due diligence on data accepted from a third party.
It also cancelled the authorisation  of Preston-based Allsure Ltd, for providing misleading information during sales calls, and of MJE Associates (Wales) Ltd in Llanelli due to concerns that the director was not competent to run the business, inadequate due diligence on data used for direct marketing, and submitting generic letters of complaint to financial institutions. This cancellation has been stayed pending an appeal.
UK 4 Legal Ltd in Huddersfield had its authorisation cancelled “for insufficient due diligence and monitoring of a third party agent, and competency concerns”.