How the Cowboy Claims Companies Sidestep the Rules

jimloxley
August 9, 2012

Working in accident compensation claims these days does bring with it something of a stigma. The problem has happened as a result of the UK’s so called ‘compensation culture’ which has been contributed to significantly by a small handful of bad-apple claims companies creating more accident compensation claims than there might otherwise be. They operate outside of Ministry of Justice (MoJ) and Information Commissioners Office (ICO) regulations and make those annoying, unsolicited phone calls and text messages to entice people to make accident compensation claims.

I’ve often wondered how they get away with it and the ICO has recently received criticism for not tackling the hundreds of complaints made every month by people being cajoled into accident claims, often for accidents which have not even happened in the first place. I recently got a phone call from one such a company on the My Compensation business phone line. The person at the other end wanted to sell our company road traffic accident leads for a reduced price. The first question I asked was whether or not he was registered with the MoJ. He replied that “of course” his company was registered and so I enquired further, asking for the website address only to find out that there was no MoJ CRM number on there.

I eventually got passed through to the team leader who admitted to me that they were, in fact, not registered by the MoJ. I enquired about how the operation worked and if it was legal. He went on to explain that initial contact was made by an overseas company. The man insisted that the initial contact was not unsolicited and came from potential claimants ticking boxes agreeing to be contacted on various marketing materials. Incidentally, my skepticism was sufficient to let the MoJ know and it’s now looking into this particular firm.

He went on to say that, once contact had been made, the lead would be forwarded to the UK branch where it would be called, I confirmed that they wanted to make a personal injury claim before being forwarded to legitimate companies such as my own. It was admitted in our phone conversation that this process was set up in order to sidestep the ICO and MoJ regulations. I believe that this is the reason the ICO has been seen to do less than might be expected; certainly less than it has the power to do. The rule-breakers are exploiting grey areas and loopholes. It must be frustrating for the individuals that deal with these matters at the ICO and, frankly, they have my sympathy. We can only hope the pending referral fee ban will stop the cowboys trading so things can go back to normal.

Jim Loxley is a Director at accident compensation claims specialist, My Compensation