RegulationAug 2 2021

FCA refuses to authorise Claims 4U CMC

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FCA refuses to authorise Claims 4U CMC

The Financial Conduct Authority has refused to authorise Claims 4U as a claims management company, after the firm failed to communicate and respond to the regulator.

According to a final notice published last week (July 30), the company had applied for permissions on July 31, 2019 but failed to provide evidence of how it would meet its prudential resources requirement, among other things.

Claims4U failed to respond to six separate requests for information considered by the FCA to be necessary to allow the application.

Between September 13, 2019 and July 14, 2020, the FCA sent Claims 4U four emails, three letters and three phone calls to elicit information.

On September 13, 2019, the FCA sent two additional emails requesting information on the firm’s SM&CR and fee payments.

The FCA failed to receive a response and on November 27, 2019, it sent a further letter to Claims 4U. 

Claims 4U then requested an extension to provide further information. 

Following this, as the FCA received no further correspondence within the time allowed, the regulator decided to refuse permissions which was outlined in a decision notice dated December 22, 2020. 

Claims 4U referred the matter to the Upper Tribunal on January 21, 2021 but again failed to submit the relevant documents.

In the end the Upper Tribunal directed the application to be struck out and proceedings were at an end. 

In the final notice, the FCA said: “The failure to provide the information raises concerns as to whether Claims 4U: a. can be effectively supervised by the authority as required by threshold condition 2C; has appropriate human resources, given Claims 4U’s failure to provide the authority with the requested information as required by threshold condition 2D; and c. will conduct its business with integrity and in compliance with proper standards as required by threshold condition 2E."

In July, the FCA refused the Part4A permission of Safe Claims Limited, after the firm failed to communicate with the regulator and in May, it also refused the permission application of United Claims Management Limited, following concerns regarding whether it meets threshold conditions.

Earlier in May, the FCA announced proposals to ban CMCs from managing Financial Services Compensation Scheme claims where they have a relevant connection to the claim.

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