Tribunal upholds decision to strip CMC of right to operate

Call centre: Owner breached conditions of her authorisation

A woman who operated an Indian-based call centre to generate personal injury and PPI leads for law firms has lost her bid to overturn the cancellation of her authorisation to provide claims management services.

The First-tier Tribunal recorded that Vijal Shah, who was authorised in 2012, said she would not be involved directly in the processing of any claims and so would not directly contract with nor represent consumers.

“The proposed business model was that she would purchase data from the commercial market then contact consumers asking them questions about whether they had an accident in the last three years that was not their fault and whether they had received medical attention or already claimed.”

Leads would then be provided to UK-based claims management companies and law firms.

The Claims Management Regulator (CMR) imposed conditions on Mrs Shah’s authorisation, requiring her to keep recordings of calls for at least six months, inform the CMR of businesses she worked with and from which she obtained data, and give details of her marketing campaigns.

In fact, Mrs Shah did not start operating until April 2017, when she notified the CMR that she would be doing business with Legend Alliance Direct Marketing, which the then regulator found was a trading name of both Consumer Surveys Ltd and of Mrs Shah.

Two months later she disclosed “the names of eight businesses, mainly firms of solicitors, she had been contracted to sell leads to” and admitted providing leads to them since May, in breach of the requirement to notify the CMR in advance.

She generated the leads through both online marketing and telemarketing, purchasing opted-in data to conduct an accident survey.

Anyone responding positively to the survey was then called back by a handler who conducted an ‘injury call’ on behalf of Mrs Shah.

The CMR launched an investigation and in June 2018 warned Mrs Shah that it was minded to cancel her authorisation for breaking all four conditions it had imposed on her.

It was also concerned that Mrs Shah may have failed to carry out adequate due diligence to establish that third parties she used to generate leads were doing so in accordance with relevant rules and legislation.

A cancellation decision was sent to her in October 2018 and she appealed to the First-tier Tribunal (General Regulatory Chamber).

The tribunal found that the CMR had been right to impose the conditions in the first place, and that Mrs Shah had not complied with any of them.

Her failure to install a system to record all calls indicated that she “did not properly assess the implications of the condition before agreeing to accept it”, it said. Similarly, she only provided details of the firms she was working with because the CMR requested them.

“We agree with the regulator’s assessment that the cumulative weight of the breaches committed by Mrs Shah indicate serious failings in Mrs Shah’s business.

“We regard those failings as systemic and evidencing a serious failure on her part to appreciate what was expected of her as an authorised person and, in particular, what was necessary to ensure compliance with the additional conditions that she agreed to…

“Her failure to acknowledge that the past breaches were serious and her continued representations that they were minor, gives has no confidence in this regard.

“Mrs Shah has given no indication that she would seek any professional assistance or undertake any training in order to ensure that these serious mistakes will not be repeated.”

The tribunal concluded that cancellation of Mrs Shah’s authorisation was “appropriate action” for the CMR to take.

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