From 1 April 2019, the Financial Conduct Authority (FCA) has begun regulating the claims management industry.
All claims management companies (CMCs) in England, Scotland and Wales will now have to demonstrate they meet and maintain minimum standards set by the FCA. All existing and new CMCs will need to apply to the FCA for authorisation. More than 900 CMCs have registered for 'temporary permission' to continue operating while they go through the FCA authorisation process.
The new FCA regime aims to boost consumer protection and the professionalism of the sector by driving up standards in the industry. The FCA wants CMCs to be trusted providers of high quality, good value services that help consumers pursue legitimate claims for redress.
New FCA requirements will benefit consumers by ensuring that CMCs give people the information they need to make informed decisions.
The new FCA requirements include: due diligence on lead generation and rules to prevent firms encouraging customers to make fraudulent, frivolous or vexatious claims or claims which have no good basis; providing clear, upfront information to customers about the fees they charge and the services they will provide; giving customers a summary document about the services they will provide before the customer signs a contract.
For more information, see Claims management companies enter FCA regulation today - https://bit.ly/2VrqkrE