Since the summer of 2013, tougher Ministry of Justice rules have been in place for Claims Management Companies (CMC’s) dealing with claims on behalf of their clients. CMC’s have to get written agreement from clients before pursuing claims and charging a fee of any nature.
A 2013 Ministry of Justice press release states that:
- CMCs must agree contracts in writing with their clients, before any fees can be taken;
- CMCs must refer to their regulatory status as being regulated by the claims management regulator rather than the MoJ
- CMCs must inform clients if they are suspended or restrictions imposed on their business within 14 days of the enforcement action being taken.
As part of the industry wide crackdown, the Regulator also banned inducement advertising by CMCs. CMC’s are not able to target consumers through advertisements which offer vulnerable individuals a cash incentive for signing up to use their services
January 2015