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This thread is devoted to Beagles' response to the proposed rules changes for claims management companies in a consultation paper issued by the Claims Management Regulator at the Ministry of Justice (MOJ).
Legal Beagles have a good working relationship with MOJ and as such we are confident that our response will be taken seriously and all your suggestions are welcome.
The consultation document includes some important proposed changes to the way CMCs are allowed to opperate, not least a requirement that up front fees cannot be taken until the customer has signed a written contract.
Although the format of the consultation paper it is a little complicated, for our purposes it is basically in 4 parts:
1) Proposed Main Amendments to the Client Specific Rules
2) Proposed Additional ‘Technical’ Amendments to the General Rules and Client Specific Rules
3) Other Regulatory issues
4) Questionnaire
Link to consultation document https://consult.justice.gov.uk/digital-communications/cmr-rules-consultation-cp15-2012
Initially I suggest we deal with the first part which comprises 3 important rules changes which propose to ban CMCs from using the fact that they are regulated by the MOJ as a selling point, a ban on taking up front fees during a phone call and a requirement to keep customers updated on their claims.
I have written an initial draft response below. As copying and pasting the full details of the proposed changes is difficult to do, please reference them in the consultation doc by the page numbers quoted.
Proposed Main Amendments to the Client Specific Rules
i. What CMCs are able to say about regulation by the MoJ (page 12)
We agree with the proposed amendment to the rule in its written form in pre-contractual information. We also agree with the suggestion that that the rule should be extended to marketing calls as it could be inferred that the Claims Management Regulator is in some way condoning or authorising the unsolicited call.
The CMR knows full well that unsolicited calls from PPI claims companies have become a bain of modern day life and for many people a relentless and tiresome distraction to their day or evening. In allowing CMCs to somehow endorse their sales call with mention of the Regulator, the CMR would be complicit in the unsolicited call process.
ii. The provision of pre-contractual information and contractual agreements with clients (page 14)
Although we agree with the proposed amendment to the wording of client specific rule 11, it should also make clear that the 14 day cooling off period begins at the point that the customer actually signs the contract and not, for example, when the customer first received the pre contractual information or the contract for consideration. In it’s present form it remains ambiguous.
Therefore we would suggest an additional sentence to the proposed wording that reads ‘’The 14 day cooling off period will commence on the that date the contract is signed’’.
iii. Requirement to keep clients updated as to the progress of their claims and any change to costs (page 18)
We are genuinely at a loss to understand why the proposed amendment to client specific rule 18 only applies to instances where a CMC has had their authorization varied or suspended. One of the most common complaints we receive is from consumers who have handed their claim to a CMC but have not received any updates whatsoever on the progress of their claim, regardless of whether an upfront fee has been paid, for many months and sometimes years and despite chasing the CMC for one. Many CMCs will simply not bother to provide any progress update at all until their claim has succeeded.
The consultation paper acknowledges that ‘’ Keeping a client informed and providing details of the progress of their case should be a fundamental part of the overall quality of service offered by a CMC. It is also a condition of authorisation that CMCs ensure any service offered meets the needs of the client’’ yet, inexplicably, the proposed amendment would seemingly allow a CMC not to have to provide any update at all except in the event it has had it’s authorization varied or suspended.
We propose that the rule should require CMCs to provide an initial update within 3 months of the signing of a contract. This is based on the fact that as the FSA's 2 stage complaints system has now been abolished, PPI providers must give a final response to any complaint within 8 weeks. The final response is critical to any claim and it is something the customer must be made aware of. Therefore a requirement to update the customer within the first 3 months of the start of the claim will encompass the crucial outcome of the final response.
Legal Beagles have a good working relationship with MOJ and as such we are confident that our response will be taken seriously and all your suggestions are welcome.
The consultation document includes some important proposed changes to the way CMCs are allowed to opperate, not least a requirement that up front fees cannot be taken until the customer has signed a written contract.
Although the format of the consultation paper it is a little complicated, for our purposes it is basically in 4 parts:
1) Proposed Main Amendments to the Client Specific Rules
2) Proposed Additional ‘Technical’ Amendments to the General Rules and Client Specific Rules
3) Other Regulatory issues
4) Questionnaire
Link to consultation document https://consult.justice.gov.uk/digital-communications/cmr-rules-consultation-cp15-2012
Initially I suggest we deal with the first part which comprises 3 important rules changes which propose to ban CMCs from using the fact that they are regulated by the MOJ as a selling point, a ban on taking up front fees during a phone call and a requirement to keep customers updated on their claims.
I have written an initial draft response below. As copying and pasting the full details of the proposed changes is difficult to do, please reference them in the consultation doc by the page numbers quoted.
Proposed Main Amendments to the Client Specific Rules
i. What CMCs are able to say about regulation by the MoJ (page 12)
We agree with the proposed amendment to the rule in its written form in pre-contractual information. We also agree with the suggestion that that the rule should be extended to marketing calls as it could be inferred that the Claims Management Regulator is in some way condoning or authorising the unsolicited call.
The CMR knows full well that unsolicited calls from PPI claims companies have become a bain of modern day life and for many people a relentless and tiresome distraction to their day or evening. In allowing CMCs to somehow endorse their sales call with mention of the Regulator, the CMR would be complicit in the unsolicited call process.
ii. The provision of pre-contractual information and contractual agreements with clients (page 14)
Although we agree with the proposed amendment to the wording of client specific rule 11, it should also make clear that the 14 day cooling off period begins at the point that the customer actually signs the contract and not, for example, when the customer first received the pre contractual information or the contract for consideration. In it’s present form it remains ambiguous.
Therefore we would suggest an additional sentence to the proposed wording that reads ‘’The 14 day cooling off period will commence on the that date the contract is signed’’.
iii. Requirement to keep clients updated as to the progress of their claims and any change to costs (page 18)
We are genuinely at a loss to understand why the proposed amendment to client specific rule 18 only applies to instances where a CMC has had their authorization varied or suspended. One of the most common complaints we receive is from consumers who have handed their claim to a CMC but have not received any updates whatsoever on the progress of their claim, regardless of whether an upfront fee has been paid, for many months and sometimes years and despite chasing the CMC for one. Many CMCs will simply not bother to provide any progress update at all until their claim has succeeded.
The consultation paper acknowledges that ‘’ Keeping a client informed and providing details of the progress of their case should be a fundamental part of the overall quality of service offered by a CMC. It is also a condition of authorisation that CMCs ensure any service offered meets the needs of the client’’ yet, inexplicably, the proposed amendment would seemingly allow a CMC not to have to provide any update at all except in the event it has had it’s authorization varied or suspended.
We propose that the rule should require CMCs to provide an initial update within 3 months of the signing of a contract. This is based on the fact that as the FSA's 2 stage complaints system has now been abolished, PPI providers must give a final response to any complaint within 8 weeks. The final response is critical to any claim and it is something the customer must be made aware of. Therefore a requirement to update the customer within the first 3 months of the start of the claim will encompass the crucial outcome of the final response.
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