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From the Ministry of Justice
http://www.claimsregulation.gov.uk/u...20response.pdf
http://www.claimsregulation.gov.uk/u...20response.pdf
4. The harmful effects of Regulation to consumers and businesses
4.1. Those already regulated by the FSA or the SRA raised the subject of double regulation and
some felt CM regulation unnecessary. There is a clear divide between the regulatory powers of
these organisations and the Claims Management Regulator and while we acknowledge there might
be some dual regulation each regulator covers a discrete element of the authorised persons
work, ensuring there is no overlap. The MoJ will continue to work closely with both the FSA and
the SRA to monitor and review emerging areas of concern or uncertainty.
4.2. Many delegates raised the issue of cold calling and felt that although prohibited in person
under the Rules it hadn’t been completely eradicated. Solicitor’s rules have a different definition for
cold calling and this appears to have caused some confusion. The small number of businesses
(mainly in the personal injury sector) that were actively engaged in cold calling have been identified
and action taken to ensure they comply with the Rules. A close working relationship with the SRA
has helped to achieve this and provide more clarity. The problem is now on a much reduced scale
and the perpetrators appear to be individuals rather than businesses.
4.3. There was concern about unscrupulous, fraudulent and potentially criminal businesses
operating within Regulations. We have a number of steps in place during the authorisation process
that helped us to deal with malpractice from an early stage. Checks are made of websites,
contracts and on those in a controlling capacity within the business. This helps to build a significant
amount of information on those we regulate and to flag up any concerns. If businesses (or the
public) have concerns or suspicions regarding an authorised business our dedicated website
provides a secure way for them to be reported directly to the Regulator. And should we find any
substance to the complaints received we have the power to sanction, suspend or cancel the
authority of that business. We also work closely with other agencies to tackle claims management
businesses suspected to be involved in insurance fraud and other criminality – most notably in the
case of contrived accidents.
4.4 Some delegates thought that communication with businesses could be improved both during
and after the authorisation process, so that those applying were aware of the status of their
application. We are considering how this could best be achieved.
4.1. Those already regulated by the FSA or the SRA raised the subject of double regulation and
some felt CM regulation unnecessary. There is a clear divide between the regulatory powers of
these organisations and the Claims Management Regulator and while we acknowledge there might
be some dual regulation each regulator covers a discrete element of the authorised persons
work, ensuring there is no overlap. The MoJ will continue to work closely with both the FSA and
the SRA to monitor and review emerging areas of concern or uncertainty.
4.2. Many delegates raised the issue of cold calling and felt that although prohibited in person
under the Rules it hadn’t been completely eradicated. Solicitor’s rules have a different definition for
cold calling and this appears to have caused some confusion. The small number of businesses
(mainly in the personal injury sector) that were actively engaged in cold calling have been identified
and action taken to ensure they comply with the Rules. A close working relationship with the SRA
has helped to achieve this and provide more clarity. The problem is now on a much reduced scale
and the perpetrators appear to be individuals rather than businesses.
4.3. There was concern about unscrupulous, fraudulent and potentially criminal businesses
operating within Regulations. We have a number of steps in place during the authorisation process
that helped us to deal with malpractice from an early stage. Checks are made of websites,
contracts and on those in a controlling capacity within the business. This helps to build a significant
amount of information on those we regulate and to flag up any concerns. If businesses (or the
public) have concerns or suspicions regarding an authorised business our dedicated website
provides a secure way for them to be reported directly to the Regulator. And should we find any
substance to the complaints received we have the power to sanction, suspend or cancel the
authority of that business. We also work closely with other agencies to tackle claims management
businesses suspected to be involved in insurance fraud and other criminality – most notably in the
case of contrived accidents.
4.4 Some delegates thought that communication with businesses could be improved both during
and after the authorisation process, so that those applying were aware of the status of their
application. We are considering how this could best be achieved.
6. Problems with the exempt introducer concept
6.1 Attendees had different experiences with exempt introducers and there was some evidence
that the understanding of the concept varied. Some businesses have difficulty in assessing and
monitoring how many claims an introducer has referred as some have multiple trading names
and/or refer claims to more that one business There was also concern that some unauthorised
businesses might be masquerading under the exempt introducer banner and it was suggested that
some form of authorisation process for exempt introducers be set up.
6.2. Guidance on the exempt introducer concept can be found on page 5 of our guidance note
‘Who needs to be authorised under the Compensation Act 2006’ published in November 2006.
This can be found at;
http://www.claimsregulation.gov.uk/u...uthorised%20gu
idance%20notes.pdf
If you still have questions please contact us via the information at the end of this document.
6.3. We carefully monitor all the provisions under the legislation including those regarding exempt
introducers but to date have no evidence of abuse or malpractice. If you have specific
information about exempt introducers attempting to use this provision to evade regulation then
please report this to us. . You should also contact us if you have evidence or suspicions that
introducers are exceeding their 25 introductions per calendar quarter quota.
6.1 Attendees had different experiences with exempt introducers and there was some evidence
that the understanding of the concept varied. Some businesses have difficulty in assessing and
monitoring how many claims an introducer has referred as some have multiple trading names
and/or refer claims to more that one business There was also concern that some unauthorised
businesses might be masquerading under the exempt introducer banner and it was suggested that
some form of authorisation process for exempt introducers be set up.
6.2. Guidance on the exempt introducer concept can be found on page 5 of our guidance note
‘Who needs to be authorised under the Compensation Act 2006’ published in November 2006.
This can be found at;
http://www.claimsregulation.gov.uk/u...uthorised%20gu
idance%20notes.pdf
If you still have questions please contact us via the information at the end of this document.
6.3. We carefully monitor all the provisions under the legislation including those regarding exempt
introducers but to date have no evidence of abuse or malpractice. If you have specific
information about exempt introducers attempting to use this provision to evade regulation then
please report this to us. . You should also contact us if you have evidence or suspicions that
introducers are exceeding their 25 introductions per calendar quarter quota.
