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FCA new approach to Claims Management Regulation.

FCA new approach to Claims Management Regulation.

In April 2019 the FCA became the new regulator of Claims Management businesses [CMCs]. At the same time the Financial Ombudsman Service became responsible for resolving customer disputes about CMSs. In June 2018 the FCA issued a consultation paper (CP 18/15) which proposed a new Claims Management: Conduct of Business Sourcebook [CMCOB] and to apply relevant parts of the existing FCA Handbook.

This is a complex area of law as it involves matters that touch upon SRA regulation (in respect of ABS and Referral Fee rules), FCA principles, Data Protection and GDPR matters (in particular consent) and also the previous Claims Management Conduct of Authorised Persons rules 2018.

The government are clearly determined to take steps to regulate a sector that has been portrayed by the press as being out of control following the failure of the old Regulator the CMRU to deal with concerns. The new CMCOB will bring in a number of new powers that will no doubt be tested by investigations and precedent tribunal decisions.

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