Claims management companies must raise advertising standards, says FCA
Regulatory Updates | 23/08/19
Claims management companies (CMCs) must do more to ensure their promotions do not mislead potential customers according to the Financial Conduct Authority (FCA). Since the FCA took over regulation of CMCs on 1 April 2019 it has reviewed over 200 CMC adverts in various media and found widespread poor-practice in CMCs.
The FCA has introduced a number of new rules in relation to financial promotions issued by CMCs to ensure that CMCs provide information to consumers that is fair, clear and not misleading. These rules require CMC firms to:
• identify themselves as a claims management company
• prominently state if a claim can be made to a statutory ombudsman / compensation scheme without using a CMC and without incurring a fee
• include prominent information relating to fees and termination fees which the customer may have to pay if a firm uses the term ‘no win, no fee’ or a term with similar meaning
These rules are designed to help consumers make an informed choice whether to use the services of a CMC.