Claims Management Services: Regulation

(asked on 3rd June 2020) - View Source

Question to the HM Treasury:

To ask Her Majesty's Government what assessment they have made of whether the Financial Conduct Authority has sufficient powers to regulate claims management companies, particularly in relation to cold calling.


Answered by
 Portrait
Lord Agnew of Oulton
This question was answered on 17th June 2020

The Government is confident that the FCA has a broad suite of authorisation, supervision and enforcement powers to regulate the conduct of claims management companies (CMCs). The Financial Guidance and Claims Act 2018 transferred responsibility for the regulation of CMCs from the Claims Management Regulator, a unit of the Ministry of Justice, to the Financial Conduct Authority (FCA), as of 1 April 2019.

This transfer was intended to enable the application of the FCA’s Senior Managers Regime to CMCs, allow for the creation of more detailed conduct rules to address issues that were causing consumer detriment, and effectively facilitate tougher regulation. The Act also provided for a ban on cold calling, unless prior consent has been given, by amending the Privacy and Electronic Communications Regulations.

Following the transfer, the FCA is currently carrying out a process of re-authorisation, whereby all CMCs must re-apply for permission to operate in the sectors regulated by the FCA. Once this process of re-authorisation has progressed further, HM Treasury will be able to make any necessary assessments of whether the current model for CMC regulation is operating effectively.

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