Claims management companies have now been banned from making unsolicited calls to consumers. The aim? To help stop consumers being harassed by nuisance calls. As a B2B sales consultancy operating in Financial Services, we’re very pleased to see this legislation.
According to a report by the Financial Conduct Authority (FCA), 69% of the UK adult population - around 36 million people - have between them in the last 12 months received approximately 2.7 billion unsolicited calls, texts or emails from claims management firms offering to help them make a claim, for example about a recent accident or mis-sold payment protection insurance (PPI).
This is equivalent to approximately 50 calls, texts or emails being made to every adult in the UK.
Highlighting the benefits of claims management companies (CMCs), the FCA pointed out that they help to secure redress for customers, including those who might otherwise not have made a claim, and can also act as an effective check and balance against poor practice by firms.
"We want CMCs to be trusted providers of high quality, good value services that help customers pursue legitimate claims for redress, and benefit the public interest," the regulator explained.
Until now, people had to opt-out of receiving cold calls by registering with the free Telephone Preference Service or withdrawing their consent while actually on the call.
The new rules mean that such calls are no longer allowed unless the consumer has already agreed to receive them. Individuals will be able to opt-in by consenting to be contacted by claims companies when enquiring about settling a claim, or when seeking claims advice, the government explained.
These measures will apply to phone calls only, not texts or emails, according to the BBC.
People who continue to receive nuisance calls can report it to the Information Commissioner’s Office (ICO), which will investigate and take action against those responsible. Firms found breaching the rules could be fined as much as £500,000.
Welcoming the move, the ICO's enforcement group manager, Andy Curry, said: "Millions of nuisance calls, texts and emails are made every year in the UK and can cause real distress to people.
"This amendment to the Privacy and Electronic Communications Regulations will increase our ability to take action against those companies who deliberately flout the law and cause real upset and harm."
The government has previously made it easier for regulators to fine those breaching direct marketing rules, and forced companies to display their number when calling customers.
James Dipple-Johnstone, deputy commissioner of operations at the ICO, told the BBC that his office received "many thousands" of complaints each year about unsolicited marketing calls.
The ICO advises, guides and serves enforcement notices to help stamp out the practice, and last year it issued 26 fines, totalling more than £3m, to some of the worst-offending organisations. We’d like to see the ICO going even further in protecting consumers from calls that are totally untargeted.