Claims management regulators have raided two businesses suspected of making thousands of cold calls.
The claims management regulation unit, part of the Ministry of Justice, revealed today that it entered premises in Swansea and Birmingham last month as part of the crackdown.
The unit has also confirmed it has fined a Bournemouth company £315,000 for serious breaches of its rules of conduct.
Elkador Finance Ltd failed to prove claimant data was legally obtained, despite being required to by the regulator.
The fine was issued for failing to conduct due diligence on the leads accepted from third parties and the lack of control over the marketing activities of those third parties. The business can appeal the fine, and it has 28 days to make representations to the First Tier Tribunal.
Kevin Rousell, head of claims management regulation, said: ‘We have taken swift and decisive action to tackle these sham firms. Our intelligence suggested that these people wanted to defraud the public and cause misery.
‘Firms should be in no doubt that if you attempt to operate outside the law and take advantage of vulnerable people – we will seek the most severe sanctions available.’
The first raid was against a Swansea company operating without a licence. It is believed to have conned the public out of hundreds of thousands of pounds through misleading marketing calls – taking one-off payments in excess of £500 from vulnerable consumers.
The second firm had made hundreds of calls a day about claims for payment protection insurance, and was believed to be linked to several other businesses operating in a network of unlicensed CMCs.
In these raids officers seized computer equipment and documents for further investigation. The unit said those arrested have been released on conditional bail pending further investigation into criminal charges.