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FCA fines CMC £70,000 for misleading customers

The Financial Conduct Authority (“FCA”) has issued its first fine to a claims management company since it took over the regulation of the claims management sector eight months ago.


PPC’s breach of rules

The FCA fined Professional Personal Claims (“PPC”)  £70,000 for misleading practices concerning payment protection insurance (“PPI“), and submitting inaccurate or incomplete PPI claims.

PPC operated websites that carried the logos of five prominent banks. PPC also sent printed materials to consumers which contained the names of the five banks without displaying PPC’s own name. The FCA stated that this could have given customers the misleading impression that PPC was submitting claims for mis-sold PPI directly to these banks, rather than through a third party business for a fee (as was the case). PPC also submitted PPI claims to the banks using identical allegations for clients, as opposed to evidence specific to each client.

Consequently, the FCA decided that PPC breached Client Specific Rule 1(c) of the Conduct of Authorised Persons Rule 2014, that all business information should be clear, transparent and not misleading. The FCA decided that PPC also breached General Rule 2, which requires a claims management company to act with professional diligence and make representations to a third party that substantiate and evidence the basis of the claim, are specific to each claim and are not fraudulent, false or misleading.

In light of PPC’s fine, the FCA has warned, “Claims management firms must ensure their advertising is accurate. Not only in terms of what they say about themselves and their services but also in terms of what is represented.”

 FCA takeover

PPC was originally investigated by the Claims Management Regulator (“CMR”). In April 2019, CMR transferred regulatory responsibility to the FCA after it struggled to keep up with policing the growing volume of companies. An independent review of claims management regulation was published, criticising the CMR for failing to keep the market in check.

The original investigation into PPC was carried out between 2015 and 2017 after a number of complaints from PPC’s clients and other financial services firms. The CMR found that PPC had breached its rules of conduct on marketing and penalised the company with a £70,000 fine. The company appealed, and while this was pending the FCA assumed the CMR’s responsibilities. In September 2019, PPC withdrew its appeal following its review of the FCA’s evidence against it.


Claims management companies experienced huge growth off the back of the PPI mis-selling scandal, by purporting to specialise in obtaining compensation on behalf of consumers. This has led to lenders paying out more than £53 billion in compensation, making it the UK’s costliest mis-selling scandal.

 Mark Steward, executive director of enforcement and market oversight, at the FCA commented, “Claims management firms have an important role to play in helping to secure compensation for their customers…this is especially true in the case of those consumers who might not otherwise make a claim.” It is therefore unsurprising that the FCA is taking a strong approach to the regulation of these companies. The fine levied against PPC, sends a clear message to the claims management sector as to the FCA’s expectations.

The FCA observed that there has been an increase in “problem cases”. In particular, it has accused some companies of acting on behalf of customers without their consent and submitting spurious compensation claims. We therefore expect to see a significant increase in FCA enforcement action against claims management companies in 2020.

© Copyright 2020 Squire Patton Boggs (US) LLPNational Law Review, Volume IX, Number 357



About this Author

Garon Anthony Litigation Attorney Squire Patton Boggs Birmingham, UK

Garon is a partner in the Litigation Practice Group. He advises clients across the full range of commercial dispute issues, including cyber liability/data breach, professional negligence, banking, pensions and insurance.

Garon regularly acts for clients who are subject to investigations or disciplinary proceedings by national and international regulators, including most recently the Financial Conduct Authority, the Financial Reporting Council and the Dubai Financial Services Authority.

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Mariyam Harunah Financial Services Litigation Attorney Squire Patton Boggs Birmingham, UK

Mariyam regularly acts for a diverse client base, including, SMEs, FTSE 100 and 250 corporations, public bodies, developers, insurers and individuals.

Mariyam has experience advising on a wide range of matters of both a contractual and tortious nature, including breach of contract, breach of warranty, misrepresentation, defamation, professional negligence, debt recovery and insurance.

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