It’s no an April Fool – from today the Financial Conduct Authority (FCA) will be in charge of overseeing the activities of the UK claims management companies (CMC). So everything from your long established PPI motor related claim, to more recent trends like botched dentistry, late flights, household accidents, cancelled holidays or medical negligence will all be covered by the FCA when it comes to complaints, new rules or setting guidelines on consumer rights.
The most significant change is the cap of 20 percent that any CMC can take from your claim as a fee. This may well prompt many people who aren’t confident when it comes to legal jargon, form-filling etc to hand the job over to claims specialists, although you can handle a typical PPI claim yourself of course.
In future companies will have a legal duty to make you aware of the right to pursue a claim for free, plus keep records of phone calls and update clients on a regular basis about the progress of any claim.
If you don’t feel happy, then you can now complain about a CMC to the FCA Ombudsman, and in theory get some compensation for your trouble.
About 900 comapnies have applied for temporary registration with the FCA, so they can operate within the new framework. But many in the industry expect some companies to drop out of the claims sector, especially when the August 29th deadline for PPI claims against banks and other finance lenders arrives later this year – after that, you’ve lost your chance to claim mis-sold PPI, and as this is the backbone of many a small claims business, some will ievitably shut up shop.
Insurance Edge received this comment from Matthew Drage, Head of External Engagement at Huntswood, who said:
“Tighter regulation of CMCs from the FCA is a necessary and welcome step. But whilst it will ensure more accountability, helping to drive up standards and increase transparency, providers should not assume that oversight from the FCA will mean a drop in CMC activity. Now is not the time to become complacent – there will always be complaints and claims made. Firms should continue to focus on rectifying potential issues and enhancing controls to prevent issues from arising in the first place.”