FCA fines PPC for misleading consumers and banks

There has been significant discussion surrounding the role and regulation of claims management companies (CMCs) in recent years and today has offered a watershed moment in the changing responsibility for this regulation.

Today the FCA revealed it has fined Professional Personal Claims Limited (PPC) £70,000 for misleading consumers using its websites and printed materials. This is the first claims management case closed by the FCA since the transfer of regulatory responsibility for CMCs to the regulator on April 01, 2019.

This decision was made due to the prominent featuring of the logos of five major banks on PPC’s websites and printed materials which, it was determined, were liable to mislead customers into believing they were submitting redress claims for mis-sold payment protection insurance (PPI) directly to their banks as opposed to engaging PPC as a CMC to pursue their claims in return for a success fee.

Executive Director of Enforcement and Market Oversight at the FCA, Mark Stewart commented on the role of CMCs, and said: “CMCs 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.” “PPC’s misleading website and marketing material suggested PPC was associated with the five banks when this was not the case,” he said. “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.”

PPC failed to present accurate, detailed, fully formed and specific complaints to banks, it was found. It had also submitted Financial Ombudsman Service (FOS) questionnaires to banks on behalf of different consumers and it was revealed that these questionnaires in part contained identical factual allegations where evidence specific to each client should have been presented. PPC was originally investigated and fined by the Claims Management Regulator (CMR), which was the original previous regulator for CMCs. The CMR launched an investigation following numerous complaints between October 2015 and March 2017 from clients of PPC and financial firms.

In December 2018, the CMR determined that PPC had breached the previous CMC conduct rules through its misleading marketing materials and by submitting misleading material to financial firms in support of its clients’ PPI redress claims. The CMR imposed a £70,000 fine on PPC and the company appealed this ruling to the First-tier Tribunal. While this appeal was pending, the FCA took over regulation of CMCs from the CMR and thus as the respondent to this appeal.

In September 2019, PPC withdrew its appeal upon reviewing evidence put forward by the FCA and the FCA imposed the £70,000 fine on PPC based on the failings outlined in the CMR’s penalty notice.

Source: Insurance Business UK