The claims management specialist has recently embarked on a number of roadshows with its legal team in its quest to build on its initial robust training programme and provide introducers with comprehensive continued professional development. Credit Issues also provides a full marketing suite and a range of approved adverts for introducer usage as well as an open door policy to its experienced compliance director.
In its recent claims management regulatory bulletin the MoJ stated that there has been a substantial increase in the number of claims management businesses using agents as a means of marketing their services. It added that if this practice is not properly supervised by the authorised business then it could cause consumer detriment and would constitute a breach of businesses conditions of authorisation.
The following guidelines have been set out for firms planning to use agents to market their services:
• There must be a legally constituted relationship of agency between the authorised business and the agent. This agreement should be in writing.
• Agents who advertise or otherwise seek out potential claimants must do so in the name of the authorised business only. Any person who advertises in their own name without authorisation would be committing an offence.
• Agents must comply with all the rules an authorised business is subject to.
• Authorised businesses will be held responsible for any rule breaches by agents purporting to be acting for them. Enforcement action will be taken against the authorised business.
However, enquiries from traders suggest that there is some confusion concerning exempt introducer status. The MoJ has specified that in order for an introducer to be considered exempt, they must fulfil all of the below criteria:
• The referral of claims must be incidental to the introducer’s main business;
• The introducer provides no other regulated claims management service, which includes advertising the service, and advising on the merits of a potential claim
• Of the cases that the introducer refers to such persons, he is paid, in money or money’s worth, for no more than 25 cases per calendar quarter; and
• Where cases are referred to authorised persons the authorised persons accept responsibility for ensuring that he complies with these rules.
The MoJ has also introduced a new claims management anonymous reporting hotline for businesses, brokers, consumers, individuals or other party’s to report details of alleged malpractice, fraudulent activity and rule breaches or poor service in confidence and anonymously.
Lee Lipson, Legal Services Director at Credit Issues, said: “It is important that the MoJ continues to look closely at the claims management sector as we, as an industry, must work together to try and increase standards of practice across the board in order to drive out the rogue element that continues to tarnish its reputation. Many firms are jumping on the bandwagon and think they can make a profit from claims management but it is vital for consumers and introducers to chose their affiliations wisely and ensure that a firm has a proven track record and specialist legal team dedicated to claims management.”
