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MOJ claims management unit cracks down on fraudsters as CMC regulation scheduled to transfer to FCA

MOJ claims management unit cracks down on fraudsters as CMC regulation scheduled to transfer to FCA

MOJ claims management unit cracks down on fraudsters as CMC regulation scheduled to transfer to FCA
The MOJ’s claims management regulation unit (CMRU) has confirmed it has raided CMCs in Birmingham and Swansea, having also recently levied six-figure fines on a Bournemouth company, Elkador Finance. The latest penalty for the Bournemouth firm brings the CMRU’s fines total to over £2m so far.

The first of the latest two raids was against a Swansea company accused of operating without a licence and using misleading marketing claims. Police arrested five people during the incident.
 
Kevin Rousell, head of claims management regulation said: ‘We have taken swift and decisive action to tackle these sham firms. Our intelligence suggested that these people wanted to defraud the public and cause misery.

‘Firms should be in no doubt that if you attempt to operate outside the law and take advantage of vulnerable people – we will seek the most severe sanctions available.’

The Birmingham business raided is suspected to be just part of a web of unlicenced CMCs that made hundreds of calls a day about claims for payment protection insurance. The police seized computers and documents to help with their investigation.

The latest raids come just weeks after George Osborne announced in the budget that the government would be following the recommendations of the Chartered Trading Standards Institute report into CMCs and transfer regulation to the FCA.

It said: “The new regime will be tougher and will ensure CMC managers can be held personally accountable for the actions of their businesses. In order to ensure that the new regulatory regime is implemented effectively, the government intends to transfer responsibility for regulating CMCs to the Financial Conduct Authority.”
 
The report praised the work of the current CMRU, but Carol Brady, the report’s chair, found that stakeholders felt that the CMRU lacked sufficient clout.