Draft Financial Services and Markets Act 2000 (Claims Management Activity) Order 2018
Debate between Richard Bacon and Caroline Flint(5 years, 5 months ago)
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Mr Richard Bacon (South Norfolk) (Con)
It is a pleasure to serve under your chairmanship, Mr Bailey. I have two or three questions for the Minister. First, in relation to cold calling and the general consensus that there is a great deal of mistrust of CMCs—even though, as the Minister said, there is a place for the CMC model—can the Minister explain what the current status of a person making a cold call would be? I speak from personal experience, because for some reason they have recently started targeting me. Not having experienced it much before, I must have had six or a dozen calls in the past five months, and for some reason, they always refer to an accident on 24 January or a date in early March. I remember thinking at the time, “Is the person making that call currently committing an offence and, if not, will they be under these regulations?” If they refer to an accident that did not take place, some sort of misleading or fraud is plainly going on. Is a crime being committed, or will a crime be committed, either by the person who makes the telephone call or by the promoters or owners of the business? If not, perhaps the Minister can explain why not.
Secondly, I refer the Minister to the BBC magazine programme “You and Yours”, which had an item today—perhaps not coincidentally, because this instrument is before the House today—that included the director general or executive director of the trade body that represents CMCs. They pointed out that many banks were misleading their own customers when they inquired directly whether they had payment protection insurance claims. Those people were told categorically by a series of high street banks that they did not have claims, but discovered subsequently that they did. In one case, a listener had phoned up asking whether he had a claim, knowing full well that he had PPI because he had the piece of paper from 20 years ago, and was told by the bank that he did not. He later got the obligatory apology from the high street bank. My second question is this: to what extent, if at all, does the instrument cover the banks? I assume that they are covered separately by the FCA, but perhaps the Minister could confirm that.
Thirdly, I was interested to hear that solicitors are exempt from the regulations. I was particularly prompted to think about this when the hon. Member for Oxford East mentioned the figure of £16 million, which I understand to be the cost of the scheme. The reason is that some years ago, when the coalminers’ compensation scheme was going on, there was a solicitor in Doncaster, in Yorkshire, who was heavily involved in processing claims for people who had been made medically unfit for work or had become ill in one way or another through working in a coalmine. That solicitor was paying himself a salary of £16.7 million a year. I remember that well, because I got the permanent secretary of the Department of Trade and Industry, as it then was, to confirm on the record that the Government’s policy in managing the scheme was not to make multimillionaires of solicitors in Doncaster, although that was its effect.
Caroline Flint (Don Valley) (Lab)
I feel that I have to intervene. The hon. Gentleman is right; not just in Doncaster but in other coalmining areas solicitors took advantage of the situation. Even though the Government were paying them for their services in handling the claims, they took compensation money from the individuals concerned. Does he agree that it is important that the Government look at every possible scenario where such loopholes can be found? If we do not think about loopholes ahead of the game, I am afraid that some of these characters will find them.
Mr Bacon
That is precisely my concern. In my latter years on the Public Accounts Committee, where I was sent to the salt mines for 16 years, the right hon. Lady—I will call her my right hon. Friend for these purposes—served alongside me. Indeed, we went jointly to Commonwealth workshops overseas.
Caroline Flint
For the record, will the hon. Gentleman confirm that I left rather early and that he stayed until the early hours of the morning?
The Chair
Order. I could never have believed that a debate on claims management companies could get so interesting. However, I feel that the debate is moving off the core issues. If we could return to them, that would be helpful.