RegulationJul 20 2021

FCA refuses CMC permission over management concerns

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FCA refuses CMC permission over management concerns
BySonia Rach

The Financial Conduct Authority has refused the Part 4A permission application of Safe Claims Limited, after the firm failed to communicate with the regulator.

According to a final notice published yesterday (July 19) the claims management company applied for permissions on May 31, 2019 but has had the application refused after failing to provide relevant information.

The firm wanted permission to carry out regulated activities of seeking out, referrals and identification of claims and advice, investigation or representation in relation to a financial services or financial product claim.

However, the FCA has refused permission after it had requested further information in relation to Safe Claim’s lack of management and communication to assist the authority in determining the application.

Safe Claims had failed to respond to 14 separate information requests considered by the FCA necessary to allow the application to be determined. 

The last request included a statement to the firm that it must contact the authority within ten business days but no response was received. 

The regulator provided the firm with a warning notice dated March 17, 2021 in which it proposed to refuse the application and that Safe Claims was entitled to make representations to the FCA about that proposed action.

As no representations were received by the FCA from Safe Claims within the time allowed, the regulator decided to refuse permissions which was outlined in a decision notice dated May 11, 2021.

Safe Claims had 28 days from the date the decision notice was given to refer the matter to the tribunal but no referral was made within the time.

In the final notice dated July 6, 2021, the FCA said: “The failure to provide the information raises concerns as to whether Safe Claims: a. can be effectively supervised by the authority as required by threshold condition 2C (effective supervision); b. has appropriate human resources, given Safe Claims’ failure to provide the authority with the requested information as required by threshold condition 2D (appropriate resources); and c. will conduct its business with integrity and in compliance with proper standards as required by threshold condition 2E (suitability).”

In May, the FCA also refused the Part 4A 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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