The number of claims management companies shut down in the past three months fell dramatically compared with the same period in 2014, figures published today reveal.
From October to December 2015, the Claims Management Regulator (CMR) cancelled eight licences. During those three months the previous year, it cancelled 70. The difference is largely to due operational reasons, as the majority of licences not renewed during the year were dealt with earlier in 2015 rather than in the final quarter, as was the case in 2014.
Four financial penalties were issued in the fourth quarter of 2015, with 51 warnings issued.
The CMR, run from the Ministry of Justice, appears to have significantly increased its activity, making 273 visits from October to December last year, compared with 22 in the same period in 2014. In total, 33 investigations were started, more than double the number started during the same period in 2014.
The update notes that the CMR continues to ‘closely monitor’ claims management companies’ compliance with the ban on referral fees, which came into force in April 2013.
It audited 45 CMCs in relation to the ban from October to December and issued 12 warning notices.
During the period, the regulator worked on two investigations into CMCs regarding their personal injury claims-handling and provided statements to West Midlands Police and City of London Police.
The number of CMCs operating in the PI market fell from 1,900 at the start of 2013 to 917 by the end of December 2015.
On nuisance calls and texts, the CMR imposed fines of £850,000 on the National Advice Clinic and £91,845 on Complete Claim Solutions during the period.
The regulator audited 30 CMCs engaged in direct marketing and warned 11 of them. It continues to investigate six companies for possible breaches of rules relating to nuisance calls and texts.