The Claims Management Regulation Unit (CMRU) has raided the offices of two claims firms suspected of making thousands of nuisance calls and ripping off hundreds of vulnerable people.
In a week of targeted enforcement action, investigators from the CMRU teamed up with police to raid and make arrests in connection with two businesses, based in Swansea and Birmingham, who are thought to be at the centre of large scale and sophisticated cold-calling operations.
Police arrested five people after a raid on the Swansea CMC which had been operating illegally without a licence. The company is believed to have conned the public out of hundreds of thousands of pounds through misleading marketing calls – taking one-off payments in excess of £500 from vulnerable consumers.
The CMC in central Birmingham, which bombarded people with hundreds of calls a day about claims for payment protection insurance, is believed to be linked to numerous other businesses operating in a network of unlicensed claims companies.
Officers have seized computer equipment and documents for further investigation, while those arrested have been released on conditional bail pending further investigation into criminal charges.
Kevin Rousell, head of Claims Management Regulation, said that the CMRU had taken “swift and decisive action” to tackle the “sham” firms.
“Our intelligence suggested that these people wanted to defraud the public and cause misery.
“Firms should be in no doubt that if you attempt to operate outside the law and take advantage of vulnerable people – we will seek the most severe sanctions available,” he said.
The CMRU has also fined a company £315,000 for serious breaches of its rules of conduct.
Elkador Finance, based in Bournemouth, failed to prove claimant data was legally obtained, despite clear requirements set by the regulator.
The fine brings the total of penalties issued by the CMRU to more than £2million.