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Baroness Ros Altmann: ‘Can more be done to stamp out cold calls by CMCs?’

cutting off nuisance call

The government is looking to change the way Claims Management Companies are regulated, but will the proposed rules go far enough to protect us? Our guest, Baroness Altmann, thinks more can be done.

The Financial Guidance and Claims Bill is currently making its way through Parliament. It’s a Bill that will move the regulation of Claims Management Companies (CMCs) to the Financial Conduct Authority (FCA), which is undoubtedly a good thing.

However, the Bill presents us with a real opportunity to ensure there are also tougher rules for CMCs, and I’ve been pushing the government to introduce other much-needed changes to improve the situation for people.

Nuisance calls

No one should be harassed by a company calling them without consent. The government’s recent support for a ban on pensions cold calling represents a major step forward for protection of people against pension scams. But such a ban is also urgently required for CMCs.

Findings from Which? highlight the scale of the problem of nuisance calls, with calls about PPI (from CMCs) the most common type.

Between July 2016 and June 2017, the Which? nuisance calls reporting tool received 23,231 reports of nuisance calls and texts. Of these, 4,468 were about accident claims, and 1,028 were about PPI.

Similarly, figures from the Association of Personal Injury Lawyers show that an estimated 51 million cold calls from CMCs are received each year.

It is critical that we protect the public from these nuisance calls and texts.

That’s why a number of my fellow peers and I proposed amendments to the Bill that would ban cold calling from claims firms.

Despite support from all parties, the government’s view is that a ban isn’t needed at the moment, and the FCA’s regulation of CMCs will help to toughen the oversight of nuisance calls.

We have also tried to include a ban on pensions cold calling in this Bill, too, but so far the government has refused to agree to take this opportunity to introduce such measures.

What else needs to be done?

There are other changes that need to be introduced if we’re really going to overhaul the claims management industry for the better. The government has already expressed support for a charge cap on the excessive fees currently charged by CMCs, but it is my view that this can, and should, be taken further.

According to the Ministry of Justice, the average commission charged for a PPI claim is 25%-30%. The National Audit Office estimates that CMCs earned between £3.8 and £5 billion just from PPI mis-selling compensation between April 2011 and April 2015. This is money that could have gone directly to claimants.

Which? has suggested that firms, rather than claimants, should be required to pay CMC charges when they are at fault. Not only would this result in more people receiving all of the compensation they are owed, but it would also encourage businesses to set up simpler and easier claims processes.

When I raised this in the House of Lords, the government noted that the FCA should look at it and confirmed that it has the power to make this change.

Over to you…

The Bill now passes to report stage, where some of the issues will be debated again.

I would be interested in your views on banning nuisance calls from CMCs, and more generally, your thoughts on improving the claims market.

So, what more should we be doing for people when it comes to protecting them against the sharp practices of CMCs?

This is a guest post by Baroness Ros Altmann. All views expressed here are her own and not necessarily those also shared by Which?.

Comments
Member

“Which? has suggested that firms, rather than claimants, should be required to pay CMC charges when they are at fault “. If I read this proposal correctly then we would all hand over our claims to the CMCs instead of doing it ourselves, and these firms would pay even more £billions to the CMCs, thus encouraging a huge industry to flourish?

There are a number of people vying for our custom when they are sure things have gone wrong and we have a good case – lawyers and solicitors for example, including those who will handle our claim if we’ve been subjected to possible medical negligence – by the NHS often. So would the NHS then pay all our excessive fees and feed them with money that should be spent on our healthcare?

I believe what we should be doing is rendering such lawyers and claims management companies largerly superfluous by making the process for pursuing legitimate claims simple enough for most individuals to accomplish without any professional help. Leave that to the tricky cases.

We need consumers to be able to use the laws created to protect them.

Member

Hi Malcolm, we want fewer people to use CMCs when they could make the claim themselves. Currently, however, firms can make it difficult for people to make a claim – either by not giving them any information ro by making the process complicated and arduous. This is where CMCs have flooded the market – PPI is a good example. What we’re saying is that if a consumer uses a CMC, the firm should pay the cost if they are found to have been at fault. This would give a much stronger incentive to those firms to do exactly what you’re saying – go direct to the consumer and make the process to claim as simple as possible, and free. These firms have the ability to drastically clsoe the market gap that CMCs have exploited – but at the moment have little incentive to do so. Sorry for any misunderstanding.

Member

@rpiggin, thanks Richard. We seem to have the same view – to get the process as simple as possible for almost all to do it themselves. Perhaps Which? address this with instructions on how to make such claims, and perhaps a fee-funded service (realistically priced), as part of its commercial arm, when a claimant might need help with finding the information they need. Any profits could only help future good causes? 🙂

Member

Good point malcolm r .

A reason to join Which? and save money if Which? handles the case and the company pays. With the benefit that this option is time limited so will cap the expenditure.

The Dutch Consumenentenbond have an arrangement with a company that deals with airline compensation charges which is another alternative model capping the charities outlay.

Member
bishbut says:
28 September 2017

Long prison terms for those responsible or running the firms .Mandatory sentences of course

Member

To me I see many issues with CMCs not just with cold calling. For one it seems to easy to set up and register as a CMC. And on social media, there are hundreds of ads for PPI, injury etc claims posts. Very few state their actual business name, even fewer quote their CMR registration number, trading names which aren’t registered or have lapsed with the regulator and web addresses that have been registered anonymously to a 3rd party or individual making it very difficult to know who you’re dealing with ( or in my case to identify who your trying to report for not being registered.) So I’d like to see CMCs made to state their full name and CMR registration number on all social media ads/pages etc. If should be an offence to register a URL in any name other than the CMC. Jail time for the directors of the CMC and whoever registered the URL. And for PPI this whole mess wouldn’t be an issue if the regulator made just made banks etc repay everyone at the start of this sorry saga. I wonder how much money has to rerouted away from HMRC by constantly drip feeding loses against profits. I’d also change the management of most regulators as this state of affairs should never have been allowed to get this bad and for so long. And to help tackle cold calling , I’d like to see caller id being made free to everyone (w/o the need to activate or ask for it ), so companies can;t hide ( spoofing needs to be tackled too.)

Member

Make buying and selling of personal data illegal.

Make all cold calling illegal.

If Which? hadn’t pushed to extend the deadline for claiming PPI, the problem would soon be going away. But now we have another 2 years of nuisance PPI calls. Thanks Which?

Member

I would add to alfa’s comment, make withholding telephone numbers illegal. This would help enforcement of “making all cold calling illegal”. It may be said that a fraudulent or shady organisation could call via an overseas country to get round this, but if it was also illegal to do that, they could be stopped.

Member
Castle says:
30 September 2017

UK Companies were banned from withholding numbers by Ofcom in May 2016. Fines of up to £2 million can be issued by Ofcom.

Member

unfortunately faking caller id is easy, and many of the callers are simply call handlers, just phoning at random and passing on the hits to the real crooks, who have stayed anonymous. Very heavy fines for breaching the Telephone Preference List are required.

Member

There are legitimate organisations that withhold there numbers for what they regard as perfectly sensible reasons – personal confidentiality on the recipients behalf, for example parts of the NHS I believe for one. I may not want other family members to check a caller’s number and find I’ve been talking to a mental health unit (as a possible example).

Member

It is not so much the ‘topic’ of the cold call pest calls that matter (unattainable number about replacing boilers must be the worst) it’s the fact that all of them should be hunted down by the regulators and BT and stopped, fined and if repeated , even if under a new name sent to prison.

B.T of course won’t do that as it earns millions from the calls, even if we pick up just to should something rude down the phone !

Member

LLL -dont you realise that the diatribe aimed at BT isn’t totally justified ? Dont you know about EXCHAMGE bundling – ie- all the other customers of NON -BT companies have their OWN exchange equipment -why arent to criticizing them ? That includes Virgin -Media .

Member

Should we fine the Royal Mail for delivering junk mail? Like BT, they are simply a carrier, it seems to me. Much cold calling will never, in my opinion, be stopped because it will come from overseas and numbers will be changed. All I believe we can do is penalise wholly-UK miscreant callers, try to identify regular numbers that exchanges can block, and recommend call-blockers to those particularly concerned or pestered. We get very very few and simply terminate them (or, in the case of “I understand you’ve had an accident” calls, describe in gruesome detail what happened and how we have suffered).

Member

I used to get cold calls almost every day but now I receive none. My regime seems to work beautifully. I answer the phone listen to who is calling, if I don’t recognise the company or the caller, I hang up immediately even if it is in mid caller conversation. I must assume there is a blacklist of unsuccessful cold calls made as I don’t recieve ANY cold calls now.

Member
William Hall says:
1 October 2017

I must try this!

Member
William Hall says:
1 October 2017

I have a CPR Call Bocker and so far have blocked 159 numbers and yet they still keep coming. I am registered with the TPS but it seems to make no difference.

Member

As your phone continues to ring with nuisance calls it is clear that the CPR Call Blocker you installed has failed to do the job you bought it for.

Blocking calls by using Caller ID information is fatally flawed, especially since the number can be faked and changed at random. The only approach proven to work is that adopted by the trueCall plug-in boxes, the BT “Call Guardian” 8500 and 8600 series handsets, the BT Halo handsets and the on-the-network deployment of Sky Shield (on Sky landlines).

The trueCall system issues a verbal challenge to all unknown callers. The called phone does not ring until that challenge has been completed. Automated calls cannot get past that. Scammers and cold-callers simply hang up. In all such cases your phone does not ring.

Only known, pre-approved, callers are let through without having to complete the verbal challenge.

Member

CPR Call-Blocker “failed ” Ian ?? – uh no ! I have one for two years now–SILENCE is golden , its down to HOW you programme it -period . The CPR Call-Blocker blocks ALL types of calls including internet generated ones . It ,aint failed me .

Member

William Hall states that he continues to receive nuisance calls. That being the case, the CPR Call Blocker has failed to do the job of blocking calls.

This is an inherent failure in any and all call blocking that is based solely on using CLI data – the telephone number supplied and shown on screen is merely a “presentation number” and it can be altered at will by the called party.

Member

Do you think I dont know about the telephone number Ian dont patronise me Ian . I have a CPR call -blocker it works because I block the lot .. Some people might have a problem programming ALL the types of blocking including VOiP . BY the way BT has confirmed to me its blocking 123/118 for me in the exchange equipment , very nice gentleman in a certain southern England location arranged it . So nice was he I sent a thank you email to his department. Now you know why I stay with BT – they aren’t perfect/not the cheapest but they do help you in the end ..