Response to FCA Letters – Claims Management Companies

The FCA’s Portfolio Letter to Claims Management Companies (CMCs) sets out the FCA’s view on the key areas of harm and risk that CMCs pose to their consumers and sets out areas of focus on the implementation of the Duty to the CMC industry:

• Ensuring advertisements are not misleading, unclear or unfair and that they are understandable to customers to enable them to make effective, timely and properly informed decisions;

• If any claims arise, ensuring the existence and merits are thoroughly investigated, including working with other firms to ensure products and services are meeting the needs and objectives of consumers;

• Putting in place systems and control to identify complaints and vulnerable customers, maintaining appropriate records and tailoring services to clients; and

• Ensuring that CMCs’ service meets the needs, characteristics and objectives of customers in the target market.

The FCA confirms that CMCs should have agreed their implementation plan for the Duty with the Board or management body and anticipate publishing a communication in the coming months containing feedback to all firms within scope of the Duty, including CMCs.