RegulationJun 28 2021

FCA fines CMC £110k for cold calling

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FCA fines CMC £110k for cold calling

A claims management company has been fined £110,000 for making unsolicited telemarketing calls to people who were not registered to receive this type of sales call.

The Financial Conduct Authority said it has fined Crosfill and Archer Claims Limited after it found the firm had been cold-calling but had no evidence that people had consented to receive the call and was unable to confirm what consent had been obtained on customer data purchased from third party data providers.

In a final notice dated June 22 but published today (June 28), it said the Claims Management Regulation Unit (CMRU) originally wrote to Crosfill and Archer to inform its directors that it proposed to impose a financial penalty of £140,000 on the firm for breaches of the Conduct of Authorised Persons Rules 2014. 

In response, the firm made written representations to the CMRU dated June 15, 2018 which detailed the improvements the firm  had made to its due diligence processes and procedures following audits by the CMRU in 2016 and the investigation in 2017. 

As a result of the firm’s written representations, the CMRU carried out a further audit on August 23, 2018 when the level of penalty was reduced to £110,000.

The bases for the CMRU penalty were due diligence breaches regarding provenance of data and ensuring that the relevant consents had been obtained by the third party data providers, the making of unsolicited telemarketing calls to numbers registered on the TPS register without the requisite consent and lack of knowledge and training in respect of a member of the firm’s staff around using the dialler.

Mark Steward, executive director of enforcement and market oversight at the FCA, said: “Cold calling customers who elected not to receive sales calls is an example of the type of cavalier behaviour claims management firms should not be engaging in. 

“Firms need to ensure they have the right governance and due diligence in place, and we will take action when we see behaviour that threatens legitimate consumer rights and interests.”

The decision follows the transfer of regulatory responsibility for CMCs to the FCA in April 2019. 

Last month, the FCA also announced proposals to ban CMCs from managing Financial Services Compensation Scheme claims where they have a relevant connection to the claim. 

sonia.rach@ft.com

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