Nuisance calls from CMCs plummet to record lows – report

Drop continues trend that began in 2018

Nuisance calls from CMCs plummet to record lows – report

Insurance News

By Mika Pangilinan

Nuisance calls from claims management companies (CMCs) inquiring about personal injuries following accidents have reached an all-time low, according to a new report from the Association of Consumer Support Organisations (ACSO).

The report, which examined the claims management sector in England and Wales, cited data from the Information Commissioner’s Office (ICO) indicating that only 1,394 accident management nuisance calls and messages were reported between January and August 2023.

This number is a stark contrast to the 25,196 complaints lodged in 2017 and shows a continuing trend of decline that began with the implementation of the Civil Liability Act in 2018, the ACSO said.

Additionally, the number of claims management companies was found to have significantly decreased, dropping from a peak of 3,213 in 2011 to a mere 546 in July 2023. According to the report, only 30 firms focus on personal injury claims, where CMCs were traditionally most active.

Complaints against CMCs have also decreased substantially, the ACSO revealed. In the financial year 2021/22, the Financial Ombudsman Service (FOS) received 703 new complaints about CMCs. However, by 2022/23, this number had fallen to 516, representing a reduction of over 50% in just two years.

Moreover, despite earlier concerns that CMCs might exploit the Official Injury Claim portal, they were found to account for only 0.3% of minor injury claims submitted through the portal.

Regulatory actions impact CMC activity

ACSO executive director Matthew Maxwell Scott commented on the report’s findings and noted how some insurance industry commentators had predicted that the Official Injury Claim portal would become a “CMCs' charter” designed to undermine reforms.

“The evidence shows that this is clearly not the case,” said Scott. “Ironically, while FOS complaints about CMCs have fallen to all-time lows, complaints about insurers have reached five-year highs.”

Scott attributed the reduction in nuisance calls and CMC activity to the regulatory actions taken by the Financial Conduct Authority (FCA), adding that “the benefits for consumers are clear.”

He also pointed out that the FCA’s latest ‘Dear CEO’ letter has shown concerns about the treatment of vulnerable consumers and embedding the Consumer Duty.

“Inflation-busting increases in home and motor premiums, often for customers who have exemplary driving records, will inevitably lead to more complaints about value for money,” Scott said.

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