CMC faces £90k fine after copying client signatures

twitter-iconfacebook-iconlinkedin-iconmail-iconprint-icon
Search supported by
CMC faces £90k fine after copying client signatures

A claims management company is facing a £91,000 fine after it was found to have copied client signatures without authorisation and breaching data rules. 

The first-tier tribunal upheld the fine against Hall and Hanley Limited in November, after finding it had acted negligently and ignored previous compliance warnings from its then-regulator the Claims Management Regulator.

The CMR first brought the case against the company in March after Hall and Hanley Limited was found to have breached rules which require CMCs to reasonably ensure any referrals, leads or data purchased from third parties have been obtained in accordance with the law.

When the CMR reviewed a sample of 16 company files, it found eight contained client signatures on claim documentation, including letters of authority, which had been copied without authorisation. 

Marketing text messages concerning PPI claims were also sent to consumers' mobile numbers, without Hall and Hanley having taken steps to check they had consented to receiving the messages.

The £91,000 fine was first imposed by the CMR, but Hall and Hanley appealed to the tribunal against the penalty.

The tribunal concluded Hall and Hanley had acted negligently in failing to provide proper training and supervision to its employees and “the underlying matter was so serious that a financial penalty is justified.”

Responsibility for the claims management sector transferred to the Financial Conduct Authority in April of this year. 

Mark Steward, executive director of enforcement and market oversight at the FCA, said the decision was an "important message" to the wider industry that CMCs must conduct business with "integrity and due care, skill, and diligence". 

"The failure by Hall and Hanley to take previous advice and warnings from the former claims management regulator and the firm’s repeated use of consumer data and customer signatures without their consent are clear examples of a firm falling short of the standards we expect."

Hall and Hanley Limited had 14 days from the date of the tribunal's decision to issue an appeal.

There are signs the FCA is starting to crack down on rogue CMCs now it has assumed regulation of the sector.

In the first penalty of its kind, the FCA fined a CMC £70,000 yesterday (18 December) after finding it had for mislead consumers and banks. 

rachel.mortimer@ft.com

What do you think about the issues raised by this story? Email us on fa.letters@ft.com to let us know.