March 2020

FS Claims

The FCA has refused to authorise CMC FS Claims after it raised concerns about how defined benefit file reviews were checked. In a final notice published on 29th January  the FCA said it had chased FS Claims Ltd with four letters, and numerous emails and telephone calls over a six week period last summer with a sizeable list of concerns about FS Claims' business plan and practice, which the FCA asked for more information about as part of its authorisation process.

 

The FCA's requests also included the company's vulnerable client policy, details of how it would ensure the security of client money and monthly cash flow and profit and loss calculations. Over the course of several months the company requested extensions to the regulator's deadlines, claiming relevant employees were on annual leave and a change in compliance support, but ultimately failed to provide any of the necessary information.

 

FS Claims applied for FCA Authorisation on 27th April 2019 but was given a warning notice on 29th November followed by a Decision Notice on the 29th December.  The CMC then had 28 days to appeal, but did not do so.  Its application was refused and the details were placed on the FCA website on 4th February.

 

 

Harlington Law

Kabir Khan, who runs Luton law firm Harlington Law, has been rebuked by the SRA for taking holiday sickness leads from unregulated claims management companies. He will not be referred to the Solicitors Disciplinary Tribunal.

 

A regulatory settlement agreement published on 4th February recorded that in November 2016 Mr Khan contracted with two companies to carry out marketing activities and refer potential personal injury claims, but he did not check whether they were authorised by the Claims Management Regulator. He accepted 202 referrals in relation to holiday sickness claims from the companies over a period of five months, but he did not pay for them because the CMCs became insolvent.

 

The SRA found that Mr Khan was reckless as to the risk of harm posed by these unregulated companies, and his conduct persisted longer than was reasonable, with Mr Khan only taking remedial action when prompted. He admitted failing to carry out his role as sole principal of Harlington Law effectively, in breach of principle 8 of the SRA Principles 2011.

 

 

Allay Claims Ltd

Allay Claims Ltd was FCA authorised on 11th February, but with restrictions on its licence. Allay is not to publish any financial promotions unless they have been certified as compliant by a specified third party. The FCA will consent to the removal of this requirement not earlier than 2 months after 7th February, and after Allay has satisfied the Authority that it is meeting and will continue to meet its standards.

December 2019

DeudaFix

On 1st December, The Sunday Times published an article about a Spanish based firm DeudaFix (debt fix), which offers help to consumers with debts of more than €5,000 (£4,260), and claims it can use a legal process to slash debts by up to 75% and freeze interest payments.

 

The Sunday Times claimed that DeudaFix is linked to a Mark Kennedy who was disqualified as a company director by the FCA for unscrupulous practices, including charging customers without their consent. An FCA report said he had displayed a lack of honesty and integrity, but the ban does not stop him operating outside Britain. Until recently he was listed on his LinkedIn profile as DeudaFix’s co-founder and chief technical officer. References to the company have since been deleted. Kennedy insisted he had provided only technology to the company to help it start up, adding that his work with DeudaFix had now ended. Kennedy, also deleted his profile photograph and said he was not employed by, or a director of, anything in Spain at the moment.

 

However, The Sunday Times maintains that emails reveal Kennedy offered to use DeudaFix to drive business volumes to a legal firm specialising in personal insolvency — adding that the work would begin in January. He later offered to invest in the company, saying that the two could become strong strategic partners.

 

 

Professional Personal Claims Limited

The FCA has fined CMC Professional Personal Claims Limited £70,000 for misleading consumers through its websites and printed materials. PPC’s websites and printed materials prominently used the logos of five major banks which was liable to mislead consumers into believing they were submitting redress claims for mis-sold payment protection insurance directly to their banks, rather than engaging PPC as a CMC to pursue claims on their behalf in return for payment of a success fee. PPC also failed to present accurate, fully formed, detailed and specific complaints to banks. It had submitted Financial Ombudsman Service questionnaires to banks on behalf of different consumers. The questionnaires in part contained identical factual allegations where evidence specific to each client should have been presented.

 

The Claims Management Regulator, under the prior regulatory framework applicable before 1st April 2019 launched an investigation following a number of complaints between October 2015 and March 2017 from clients of PPC and financial firms.

 

On 5th December 2018, the CMR determined that PPC had breached the previous CMC conduct rules by using websites and marketing materials that were misleading and by submitting misleading material to financial firms in support of its clients’ PPI redress claims. The CMR imposed a £70,000 fine for these failings.

 

PPC appealed on 21st December 2018 to the First-tier Tribunal against the CMR’s penalty notice. While the appeal was pending, the FCA took over regulation of CMCs from the CMR. The FCA therefore replaced the CMR as the respondent to PPC’s pending appeal. On 16th September 2019, after reviewing the evidence put forward by the FCA, PPC withdrew its appeal, and the FCA therefore imposed the £70,000 fine on PPC for the failings identified in the CMR’s penalty notice.

 

Shepherd and West

On 10th December CMC, Shepherd and West Ltd was granted full authorisation by the FCA. Its sole director is Ciaran Hamilton who has, or has had, 13 other directorships including currently Legal and Financial Solutions Ltd at the same address as Shepherd and West Ltd. Legal and Financial Solutions Ltd used to be a regulated CMC trading as LFS Claims but does not appear to have FCA authorisation currently.

 

Ciaran Hamilton was a director of CMC Chadney-Smith Associates Ltd (which currently holds FCA Temporary Permission) from July 2017 to September 2017, and was appointed a person with significant control.  Co-directors included Damien Kennedy and a confirmation sheet dated 3rd July 2017 lists the shareholders as Nicholas Smith, Ciaran Hamilton, Legal and Financial Solutions Ltd and disqualified director Mark Kennedy (see DeudaFix above). 

 

Lead generator firm Hennessy Jones

The Financial Services Compensation Scheme has received more than 2,000 claims against a trio of financial advice firms found responsible for pension transfer failings by the FCA. In May, the FCA said it was seeking to ban and fine the directors of three financial advice firms – Financial Page, Henderson Carter Associates and Bank House Investment Management – for acting without integrity over their pension advice business.

 

The regulator’s decision notices state all three firms were receiving customer introductions from the same lead generator firm, Hennessy Jones, to facilitate customers moving their pensions to Sipps investing in high risk, illiquid assets not regulated by the authority in which Hennessy Jones had a material financial interest. This interest was not disclosed to customers.

 

The FCA states that the advice firms adopted a pension review and advice process initiated and influenced by Hennessy Jones. This resulted in customers who met certain pre-set criteria being advised to switch their pensions to Sipps investing in the loan notes in which Hennessy Jones had an interest.

 

Alistar Green Legal Services

In a recent tribunal, a Judge increased the fine on Alistar Green Legal Services by £10,000. AGLS were originally fined £80,000 by the Information Commissioner for making a number of nuisance calls. However, the judge highlighted that the company director had demonstrated a clear pattern of wholesale disregard for data protection law. Director Kabir Abbas Sharif had previously controlled Lumen Corporation and liquidated the company before the ICO could take action against its nuisance marketing.

 

JMP Partnership

CMC JMP Partnership a family firm based in Sandown on the Isle of Wight, has announced it is set to close next year after 13 years of business. In July, the claims management company closed to new clients, and five months on, the firm has announced it will close for good, and the directors will retire. They say that they have really enjoyed taking £65 million from the banks and putting it back into the consumers’ pockets, without mentioning the cut they took for themselves - 20% of the gross refund plus VAT – so probably around £13 million. They also assert that the CMC industry is closing by one or two firms a day and that the writing is on the wall for the entire industry. With JMP Partnership closing (it had 1,600 clients producing over 2,000 claims cases), 15 individuals will lose their jobs by March 2020.

 

ME Legal and Financial Ltd

CMC ME Legal and Financial Ltd, based in Cheadle, Cheshire, which had Temporary Permission from the FCA is now winding down its CMC business. From 4th December, the firm could no longer take on, or offer to take on, any new business which would constitute a regulated claims management activity and with effect 4th January 2020, the firm is no longer able to carry out any regulated claims management activities. Its sole director is Philip Edward Jones who has, or has had, 12 other directorships.

 

Hall and Hanley Limited

The First-tier Tribunal has upheld a fine of £91,000 imposed on CMC Hall and Hanley Limited by the Claims Management Regulator, the former regulator for claims management companies. The hearing for the Tribunal was conducted by the FCA which has taken over the functions of the CMR. The £91,000 fine was initially imposed by the CMR under the previous regulatory regime for CMCs due to data breaches and unauthorised copying of client signatures. H&H had appealed to the Tribunal against the fine.

 

November 19

First Claims Group

CMC First Claims Group is winding down its regulated claims management business. From 7th November it has not been permitted by the FCA to take on any new business and many not conduct any regulated claims management business from 7th December. It is becoming clear that a significant number of CMCs that were granted Temporary Permissions by the FCA are failing to meet the requirements for full authorisation. This does pose questions as to the legitimacy of their historic operations.

 

 

The Claims Experts Ltd

CMC The Claims Experts Ltd, trading as Impakt Claims, was authorised by the FCA on 30th October 2019. One of its directors is Vincenzo Vernon who, it seems, used to be a director of Direct Financial Claims Limited which, trading as paydayrefunds was one of the most prolific CMCs submitting blanket and unsubstantiated financial claims. It has now been struck off the Companies House register.

 

Interestingly, whilst Vincenzo Vernon, date of birth September 1970, appears as a former director of Direct Financial Claims Limited at Companies House, he is not listed as having any other directorships. Meanwhile, Vincenzo John Vernon date of birth October 1970 as a director of The Claims Experts Ltd is listed as having, or having had, five directorships – but not including Direct Financial Claims Limited.

 

So are Vincenzo Vernon, date of birth September 1970 (according to Companies House) and Vincenzo John Vernon date of birth October 1970 (according to Companies House) two people with very similar names, born a month apart, and both operating in the same CMC line of business – or perhaps one and the same?

 

 

Resolver

The company initially behind Resolver was Resolving Ltd whose CMC licence lapsed in August 2019. There was also Resolving UK Ltd (same directors as Resolving Ltd) where Richard Lloyd (now an NED on the FCA Board) resigned as a director in April 2019. Resolver Consumer Online Ltd (some new directors, but two from the previous companies) is now running Resolver and was incorporated in March 2019.  Resolving Ltd is listed as the majority shareholder. The online privacy policy refers to the Resolver Group and the T&C’s confirm its partnership with Money Saving Expert, but it is not FCA authorised.

 

Essentially, Resolver was operating as a CMC and obtained a licence from the Claims Management Regulator just before the FCA took over regulation of CMCs on 1st April 2019. But Resolver had always claimed not to be a CMC yet its automated processes appeared to fit the FCA definition. It seems that a new version of Resolver has quietly emerged, run by a new company, that is attempting to operate in a manner that falls outside the definition of a CMC. The revised iteration is a lot less campaigning in its stance, describing itself now as a free, independent issue resolution service that connects consumers with businesses around the world, helping them find the best outcome every time.

 

 

Lend a Hand Finance Ltd

Another CMC has failed the FCA authorisation process. Lend a Hand Finance Ltd no longer has FCA authorisation status with effect 1st November.

October 19

Exploitative debt advisers and lead generators

Google is targeting paid-for debt advice firms masquerading as free debt charities in a tightening of its rules on advertising. Firms which charge people for debt management services were paying to be promoted in Google searches for charities like StepChange and the National Debtline. StepChange said it was having to pay the search engine extra just to appear above the copycat firms. Google has now announced that, from November, only firms which can prove they are regulated by the FCA or as Insolvency Practitioners will be able to advertise on debt-related matters. It hopes this will stop those with problem debt being tricked into paying for debt management plans, believing they are speaking to an adviser for a well-known charity, such as StepChange.

 

 

We Fight Any Claim

A further 120 jobs are to be lost at claims management company We Fight Any Claim at its Cwmbran call centre, bringing the total to 250. In September it announced it was shedding 130 jobs. 150 of its 400 staff will remain at the company.

 

 

Centurius Ltd

Two complaints were upheld against Centurius Ltd by the Advertising Standards Authority. Centurius Ltd is a lead generation company that operates what appeared to be a pensions price comparison website. It would pass on consumers details to financial advisors, but the ASA considered that this information was not made sufficiently clear on the website and that its advertising falsely implied that Centurius Ltd was acting for purposes outside its trade, business, craft or profession (misleadingly to claim that it provided financial advice), and did not make clear its commercial intent. The ASA told Centurius Ltd, trading as www.comparing-pensions.co.uk  not to claim or imply that it was acting for purposes outside its trade or business and to make clear the commercial intent of its marketing.

 

Direct Financial Claims Limited

On 2nd October there was an application to strike Direct Financial Claims Limited off the Companies House Register. Direct Financial Claims Limited, trading as PaydayRefunds.co.uk was one of the most aggressive CMCs in 2018 but in many cases failed to validate the facts of the consumer claims it promoted. A large number of its claims had to be withdrawn from consideration by the Financial Ombudsman when this lack of validation came to light.

 

Compare My Claim Limited

On 14th October there was an application to strike Compare My Claim Limited off the Companies House Register. It had been first incorporated on 1st March 2019 and does not appear to have been FCA authorised. The website comparemyclaim.com says it is a trading name of Bollin Marketing Limited (same registered address as Compare My Claim Limited) whose name was changed to Clickdrive Media Ltd on 20th May 2019.

 

 

Mohammed Aumran

A former employee of a claims management company has been jailed for three years and one month after abusing his position at the firm and also making fraudulent claims on his own insurance policies. Leeds Crown Court handed the sentence to Mohammed Aumran, 42, of Pudsey, Leeds, on 10th October. A month earlier, Aumran plead guilty to six counts of fraud by false representation and one count of fraud by abuse of position. He also diverted around £18,000 into his own account when he worked at a claims management company and attempted to divert nearly £17,000 more.

 

Trees

Looking for new income streams, CMCs are targeting local Councils over damage caused to properties by tree roots. One Council is working its way through 60 disrepair claims at an estimated total cost of £240,000. Tree removals are becoming more prevalent due to increased notification of damage to structures and buildings through root damage.

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