Why do they have your data?

Claims Management Companies (CMCs) have for many years attracted a lot of negative press because of the way they conduct their business.

Whilst many CMCs are ethical and above board, there is a small minority who will stop at nothing in order to get a potential customer’s attention, from “cold calling” to sending text messages and mass mailshots by email. Many of the companies that advertise on radio, TV, or in the papers are likely to be fine, but what about the CMCs that send you unsolicited texts, emails or “cold call” you?

Bulk Email

The potential to use “bulk email software” is easy as there are literally hundreds of companies that can provide this software. At a click of a button, a personalised email can be sent to thousands of people. This process is great from a marketing perspective, but not if you are continually the recipient of spam emails. In addition, in many cases, the recipient may not have agreed to receive these emails and as a consequence, a number of laws may have been broken.

Many CMCs buy data from genuine lead generation companies, who have acquired the data in a compliant manner. Generally, these companies will have no idea if you are interested in their specific product or service but will be relying on an indication that you may be. If you have completed a telephone survey or online survey, then you may have opted in to receive calls or correspondence in respect of certain products and perhaps only for a given period of time say 30 days.

Cold Calling

So what about the “cold caller” who contacts you and knows that you have a timeshare with a specific resort in Tenerife or solar panels from a certain installer, or that you have an investment with ABC Bank? These are the “cold callers” that you should not engage with. How do they know about you? Where did they get your details from? The truth is that they probably obtained your details illegally. In some cases, these callers will be somehow related to the company who sold the original product such as an ex-employee, director, or in some cases the owner of the original company. Sometimes the “cold caller” will have bought your data on the black market.

So what happens if you make a claim via a company that “cold calls” you? Firstly, if the company can’t resolve your dispute, which is very often with a bank or credit card company, then it is unlikely that they will find a solicitor who will handle your claim for them (solicitors must not do work for clients who were obtained by cold calling). Secondly, as of the 1st April 2019, all CMCs, even those that previously took claims under Section 75 of The Consumer Credit Act 1974 and didn’t need to be regulated, will now have to become regulated by the FCA. The “cold callers” typically seek to take claims under Section 75.

New Regulation

CMCs that don’t apply for authorisation from the FCA will have to write to their clients and inform them that they can no longer represent them, and they will not be able to charge them a fee – in effect at that point they will have worked for nothing and your claim may be lost due to the time delay.

CMCs that do apply to be regulated by the FCA, will be subjected to more rigorous ongoing checks, which may involve being able to prove just how each customer contacted them in the first place, to ensure that they have not been generating new business by unethical means. If the CMC can’t demonstrate how the customer first contacted the CMC, then the FCA may undertake further investigations as to the origins of the lead, which could lead to the CMC’s license being revoked and your claim being further delayed.

There is one way of course that consumers can avoid running into any problems with a CMC, and that is to use a solicitor. Solicitors will not “cold call” you, and will only ever operate in your best interests and must treat you fairly. In addition, solicitors are regulated by the SRA which is a very strict regulator so you will have the comfort of their oversight. Solicitors will now agree “no win no fee” arrangements like a CMC and will provide you access to highly qualified legal professionals.

So who are you and what do you do?

We are Lincoln Green Solicitors a regulated and trusted legal institution with a team of legal experts who work tirelessly for our clients.

We are dedicated to the protection of consumers’ rights across the board and help consumers who have been treated poorly reclaim their money and be compensated for their loss.

We hold ourselves to the highest standards so you can be confident our dealings with you will be fair, honest and professional.