Claims Regulator received 205 notifications of businesses trading without authorisation between July and September

The Claims Management Regulator (CMR) received 205 notifications of businesses trading without authorisation between July and September of this year.

The watchdog also conducted 87 audits, issued 63 warnings and cancelled the licence of 34 claims management companies (CMC) during the summer.

It has continued to crack down on CMCs specialising in holiday sickness claims, having investigated two authorised CMCs for alleged rule breaches, identified 35 unauthorised businesses, and removed seven CMC websites that have been operating illegally. 13 of the unauthorised claims operators have now ceased trading and investigations are ongoing into the other 22 businesses.

In its quarterly enforcement action update, the CMR said that it was reacting to an increase in holiday sickness claims and was focussed on addressing misleading marketing; monitoring telemarketers and their use of data; ensuring that the activities of CMCs are not likely to place solicitors in breach of their code; and dealing with unauthorised activity effectively.

In the PI sector, the CMR audited 42 CMCs; visited 20 of them; and issued 14 warnings advice notices to those that were non-compliant with the referral fee ban, general rules and regulations.

Complaints about mis-sold PPI remain the most active area in the financial claims sector for the CMR. It said that it was tackling malpractice in the sector on a risk-assessed basis, and that it had audited 26 CMCs; continued investigations into 14 of them; and issued 11 warnings to CMCs.

A further 37 audits were carried out of CMCs engaged in direct marketing and 11 warnings were issued to authorised CMCs engaged in non-compliant direct marketing.

On 2 October, the regulator prosecuted My Life Adviser Ltd for conducting regulated claims management services without authorisation. The company was fined £40,000 for eight offences under the Compensation Act 2006 and ordered to pay over £40,000 in costs and a victim surcharge of £170.

Mark Dugdale