The Financial Conduct Authority has today taken over the role of regulating the claims management industry. From now on, all claims management companies (CMCs) in England, Scotland and Wales will have to demonstrate they meet and maintain minimum standards set by the UK’s financial watchdog.

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.

Once authorised, the FCA has a range of tools and powers it can use if firms do not comply with the rules. This may involve requiring a firm to change its business practices (eg ensuring its communications with consumers are clear, fair and not misleading), imposing a financial penalty or refusing to authorise a firm if there is serious misconduct.

Executive director of supervision, retail and authorisations at the FCA, Jonathan Davidson said the new rules will ensure customers get a better deal. “Today brings a new regime and rules for regulating the claims management industry. Many CMCs play an important role in helping to secure compensation for customers, including for those who otherwise might not make a claim. The new regime has consumer protection and CMC professionalism at its heart. It will mean that customers will be protected from claims management cowboys and get a better deal.'

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