Increase in Closure of Rogue Claims Management Companies
The Financial Conduct Authority took over the regulation of CMCs in April 2019. As a result of this, any Claims Management Company that had not applied for temporary authorisation could not legally make a claim for anyone.
The goal of the FCA’s new approach is to look after consumers by improving the standards and professionalism of the sector. Jonathon Davidson, FCA’s Executive Director of Supervision, Retail and Authorisations has said, “as in many regulatory issues, it is often a few bad actors that tarnish the reputation for the many, and our aim as a regulator is to come down on them very hard”. The FCA’s new regime aims to eliminate the ‘bad apples’ of the industry, such as those who regularly cold call and use forceful sales techniques. Those looking to exit a timeshare contract can often fall victim to this. Here at Athena Law, only highly experienced and qualified solicitors will deal with your case. If you would like more information on what we do, please get in touch today, we are always happy to help.
CMC’s must now meet a new set of requirements, which have been set by the FCA. CMC’s should provide customers with a summary document before any contract is signed. The text should include clear and upfront information regarding services and fees. The FCA wants CMCs to be trusted providers of high quality, good value services that help consumers pursue legitimate claims for redress. Customer should feel empowered and confident when making well-informed decisions.
CMC’s must now record and retain customer telephone calls for a year after their final contract. This will ensure the claims management companies are not using forceful sales techniques, as well as to support customer complaints. The new set of standards set by the FCA should help to drive up standards and better the professionalism of the industry.
In response to a CMC not complying with the new set of standards, a company may be required to change its business practices (for example, not misleading customers regarding fees and services). The company could also face a financial penalty, and the FCA could even refuse to authorise the firm. As a result of this, we are expected to see many of the rogue timeshare claims companies to close down over the coming months. Many of these companies do not comply with the new standards, operating on a no-good basis. The FCA has stated that any of these companies not regulating properly will come under investigation instantly, especially any firms with a high volume of customer complaints.
Data from April 2019 showed that already over 900 claims management companies had registered to continue trading while they seek full authorisation from the FCA. However, the FCA stated that just because such companies had received their temporary authorisation, did not mean they will be granted approval straight away.
CMC’s are now expected to inform their customers of free alternatives, such as the Financial Ombudsman Service (FOS) or the Financial Services Compensation Scheme (FSCS). To avoid any customers being misled, increase customer protection, and to rebuild trust. Jonathon Davies also said that he believes customers will be protected from claims management cowboys, helping customers to get the deal they deserve.
Here at Athena Law, we understand that exiting a timeshare contract can be stressful and overwhelming, but that is not how we do things. We will ensure the process is quick, and that you have all the information you need. Our specialist timeshare solicitors offer a free, initial consolation. We will go over all the details of your case, and inform you of whether your claim is viable. Call us today on 0161 839 8847, send over an email to email@example.com, or visit our website.