The Solicitors Regulation Authority has issued its biggest ever fine, against a business which sent six million marketing letters containing misleading statements.
In an agreed outcome with the practice, the SRA ordered that Hertfordshire firm Findmyclaims.com Ltd pay £124,436 after complaints from members of the public.
The fine is the third biggest ever levied against a law firm, and the largest ever issued solely by the SRA. Under current rules, the SRA can fine traditional firms only up to £2,000 before the case moves up to the Solicitors Disciplinary Tribunal. However it has the power to fine alternative business structures up to £250m.
In a notice published today, the SRA said payment protection insurance specialist Findmyclaims, licensed in November 2016, sent millions of letters in plain envelopes on which was printed: ‘Important information enclosed’ and ‘Authorised and Regulated by the Solicitors Regulation Authority’.
The letters claimed that PPI could not be hidden from its ‘professional forensic investigators’, but at the time the firm did not employ anyone with the job title of investigator.
The firm had no process in place to verify who was instructing it. Information from a questionnaire sent to clients was automatically transposed and formatted into the claim bundle. Over the 10 months in which it sent out the letters, the firm settled 17,855 PPI claims resulting in the recovery of more than £42.6m.
The firm accepted sending marketing letters containing misleading statements, and giving the impression the envelopes contained important information.
It further accepted having a system in place which resulted in potentially misleading information being routinely inserted into claim bundles, and failing to carry out proper checks on potential clients.
In mitigation, taken into account by the SRA, the firm said it had co-operated fully with the investigation, had upgraded its IT system and amended its marketing letters. There is also a new procedure for electronic verification of all clients.
The fine was calculated as 1.3% of the firm’s annual turnover, reduced by 20% to reflect the mitigating factors.
An SRA spokesperson said: ‘The fine we have agreed with Find My Claims is substantial, and is our largest ever. It reflects the millions of letters with misleading information that were sent out across the UK and that this was no isolated incident.
‘However, after the misconduct was discovered, the firm co-operated fully with us and has changed its processes accordingly to make sure this does not happen again.
‘The deadline for making PPI compensation claims is now only six months away, so marketing activity will doubtless increase. We are clear that all firms involved in this work must adhere to the standards we set - we will take robust action if we are given evidence of misconduct.’
A Findmyclaims.com spokesperson said: 'Whilst the fine we have agreed with the SRA is substantial, it is worth noting that it reflects the size of our business which has grown dramatically in the past three years. Since the start of 2016 we have helped nearly 130,000 clients recover over £232m from Payment Protection Insurance (PPI) policies mis-sold to them by their financial service providers. We provided our recovery service to almost 29,000 of these clients for free.
'We understand that out of six million marketing letters we sent, seven resulted in complaints to the SRA. We are grateful to the SRA for highlighting their concerns and for helping us improve our consumer communications. We now understand why our original communications were misleading in parts, but it is important to emphasise that no consumers were ever financially disadvantaged as a result.'