Claims management companies must do more to ensure their promotions do not mislead potential customers the Financial Conduct Authority has said. This warning comes after the FCA has reviewed over 200 CMCs since it took over their regulation in April 2019.
Among the examples of bad practice seen by the regulator are the use of the term ‘no win no fee’ without setting out the fees that the customer must pay; a failure on the claims management company to identify itself as such; and a failure to state that a customer could make a claim to a statutory ombudsman or statutory compensation scheme, such as the Financial Ombudsman Service, without using the services of the firm, and without paying a fee.
Executive director of supervision at the FCA’s retail and authorisations division, Jonathan Davidson said that while many CMCs play a significant role in helping consumers to secure compensation, those using misleading, unclear and unfair advertising practices to get business is completely unacceptable.
“We won’t hesitate to take action where we consider that customers are being misled or otherwise treated unfairly by poor advertising.
“Firms should also understand that we will take their compliance with our rules on financial promotions into account when considering applications for full authorisation.”
Printed Copy:
Would you also like to receive CIR Magazine in print?
Data Use:
We will also send you our free daily email newsletters and other relevant communications, which you can opt out of at any time. Thank you.
YOU MIGHT ALSO LIKE