Maxwell Scott: FCA has brought the CMC sector under control
The landscape for claims management companies (CMCs) active in the personal injury (PI) market has changed dramatically, with just a “rump” remaining, new research has found.
Complaints to the Financial Conduct Authority (FCA) have fallen to “all-time lows” as their numbers continue to shrink.
The Association of Consumer Support Organisations (ACSO) also said personal injury nuisance calls from CMCs have fallen sharply – but at the same time, the Association of Personal Injury Lawyers (APIL) has renewed its call to ban them.
Complaints about CMCs received by the Financial Ombudsman Service (FOS) have fallen by 50% in only two years, from 1,113 in the financial year 2020/21, to 703 the following year and only 516 in 2022/23.
Meanwhile, nuisance calls fell to 1,394 between January and August this year, according to figures from the Information Commissioner’s Office.
ACSO said it expected the annual total for this year to be around 2,000, compared to nearly 6,000 in 2021 and over 25,000 in 2017.
“While ACSO would like to see this number fall even further, it does show the extent to which this issue is rapidly diminishing in its impact on consumers.”
From a peak of over 3,200 regulated CMCs back in 2011, by July 2023 there were just 546 in operation. Of those providing advice rather than just generating leads, only 30 firms covered PI.
Meanwhile, the latest data from the Official Injury Claim (OIC) portal found that only 0.3% of claimants using the service appointed a CMC.
ACSO said it should be no surprise that the remaining regulated CMCs were largely focused on financial or other claims, since they were “no better placed to try and make profits from an OIC claim than any legal practice”.
It said the landscape for claims management services had “changed dramatically in a short time”, with “the more robust regulatory framework provided by the FCA, recent government legislation and changing behaviours reducing a once large industry to a small rump”.
Matthew Maxwell Scott, executive director of ACSO, said the report showed that insurers’ predictions that the OIC would become a “CMC’s charter” were clearly not the case.
He added: “Ironically, while FOS complaints about CMCs have fallen to all-time lows, complaints about insurers have reached five-year highs.
“The FCA has brought the CMC sector under control and the benefits for consumers are clear: tackling cold calls, greater transparency and certainty on what people have to pay, an industry that is shedding its poor reputation and a market providing higher-quality services to those consumers who choose to use them.”
APIL renewed its longstanding call for the government to ban cold calls about PI claims “once and for all” after a survey of over 2,000 UK adults it commissioned from YouGov found that 38% had received a cold call or spam text in the past 12 months.
A large majority (86%) said the experience had left them “annoyed, angry, anxious, disgusted or upset”, while almost nine out of ten wanted a total ban on calls and texts about injury claims.
Consumers had received an average of seven cold calls or texts in the past 12 months, while 8% received 12 or more.
Mike Benner, chief executive of APIL, commented: “We want the government to listen to the public and implement a proper ban on cold calls and spam texts which tout for personal injury claims business.
“The research demonstrates that people have really strong emotional responses to these unwanted calls, so it’s no surprise an outright ban would have such overwhelming support.”
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