George Osborne has said that regulation of claims management companies (CMC) will be moved from the Ministry of Justice to the Financial Conduct Authority.
The move, announced in today’s Budget, is expected to take place in 2018. It comes on the back of an independent review carried out into regulation of CMCs. The review, led by Carol Brady, a non-executive member of the Claims Management Regulation Board and chair of the Chartered Trading Standards Institute’s Board, found that there was still widespread misconduct in the CMC sector.
It also said that the current CMC watchdog, the Claims Management Regulatory Unit, lacked the regulatory toolkit required to minimise detriment and maximise compliance.
According to the Chancellor, the new regime will be tougher and will ensure that “CMC managers can be held personally accountable for the actions of their businesses”.
The review also recommended that all people working in CMCs should be made to pass a fit and proper persons test; that CMCs record all calls with clients; and that there should be a standardised disclosure document to help consumers be better informed when signing any contract with a CMC.