Final notice 2019: Professional Personal Claims Limited (PPC)

INAL

NOTICE

eference

Number:

ddress:

Date:

Professional Personal Claims Limited (“PPC”)

835856

4 Old Park Lane, Mayfair, London, W1K 1QW

and 34 Clarence Street, Southend On Sea, SS1 1BD

17 December 2019

ACTION

1.1.

For the reasons given in this Final Notice, the Authority hereby imposes on PPC a

financial penalty in the sum of £70,000 pursuant to section 206 of the Act.

SUMMARY OF REASONS

2.1

PPC is a claims management company (“CMC”). CMCs play an important role in

helping to secure compensation for their customers, including for those who otherwise

might not make a claim. However, misconduct by CMCs, such as misleading

advertising and the pursuit of unfounded compensation claims, can cause widespread

harm.

2.2

With effect from 1 April 2019, responsibility for the regulation of CMCs was transferred

from the Claims Management Regulation Unit (“CMRU”) (a unit of the Ministry of

Justice) to the Authority, whereupon new rules governing the conduct of CMCs came

into force. Prior to 1 April 2019, a different regulatory regime governed the conduct

of CMCs, namely the Conduct of Authorised Persons Rules 2014 (“CAPR”), which had

been made by the CMRU under the Compensation (Claims Management Services)

Regulations 2006 (“2006 Regulations”). The 2006 Regulations and the CAPR do not

apply to conduct by CMCs from 1 April 2019 onwards but did apply to PPC’s conduct

before that date.

2.3

On 20 June 2017, the CMRU under regulation 51 of the 2006 Regulations notified PPC

that it was minded to impose a financial penalty on PPC for breaches of the CAPR (the

“Minded-to Letter”). After considering the representations made to it by PPC, the CMR

on 5 December 2018 and acting under regulation 52 of the 2006 Regulations notified

PPC that it was required to pay a financial penalty of £70,000 to the CMRU (the “Penalty

Notice”). The Minded-to Letter and the Penalty Notice are collectively referred to in

this Final Notice as the “CMRU Notices” and are annexed hereto respectively as

Annexes A and B.

2.4

PPC appealed to the General Regulatory Chamber of the First-tier Tribunal (“FTT”)

against the Penalty Notice. Pursuant to articles 53 and 65 of The Financial Services

and Markets Act 2000 (Claims Management Activity) Order 2018 (“2018 Order”), which

contains transitional provisions for the transfer of regulatory responsibility from the

CMRU to the Authority from 1 April 2019, the Penalty Notice is to be treated as a

decision notice given by the Authority under section 208(1)(b) of the Act, and the

Authority was substituted for the CMRU as the respondent to PPC’s pending appeal.

2.5

The CMRU Notices stated that PPC had (inter alia):

(1)

Operated five websites on which the names and logos of five major UK banks

were prominently displayed and the domain names of which included the names

of these banks (“PPC Bank Websites”);

(2)

Sent printed materials (including “Claim Forms”) to consumers on which the

names of the five banks, but not PPC’s own name, were prominently displayed;

(3)

Through the PPC Bank Websites and these printed materials, led some

consumers to believe that they were submitting claims for redress for mis-sold

payment protection insurance (“PPI”) directly to the lenders with whom they

had taken out PPI, whereas in reality consumers were engaging PPC as a CMC

to pursue claims for redress on their behalf in return for payment of a success

fee; and

(4)

Submitted claims for redress for mis-sold PPI to the five banks using Financial

Ombudsman Service questionnaires (“FOS Questionnaires”) into which PPC had

inserted very similar or identical factual allegations for different clients, leading

the CMRU to conclude that PPC was failing to present accurate, fully formed,

detailed and specific complaints to banks.

2.6

On 16 September 2019, PPC under rule 17 of The Tribunal Procedure (First-tier

Tribunal) (General Regulatory Chamber) Rules 2009 withdrew its appeal against the

Penalty Notice with the FTT’s consent.

2.7

Accordingly, the Authority hereby imposes a financial penalty in the amount of £70,000

on PPC for the failings identified in the CMRU Notices.

DEFINITIONS

3.1.

The definitions below are used in this Final Notice:

“2006 Regulations” means the Compensation (Claims Management Services)

Regulations 2006 made under the Compensation Act 2006;

“2018 Order” means The Financial Services and Markets Act 2000 (Claims Management

Activity) Order 2018;

“the Act” means the Financial Services and Markets Act 2000;

“the Authority” means the body corporate previously known as the Financial Services

Authority and renamed on 1 April 2013 as the Financial Conduct Authority;

“CAP Code” means the UK Code of Non-broadcast Advertising, Sales Promotion and

Direct Marketing;

“CAPR” means the Conduct of Authorised Persons Rules 2014;

“Claim Forms” means documents sent to consumers by PPC to obtain information and

setting out the terms and conditions subject to which PPC would pursue PPI redress

claims on their behalf;

“CMC” means claims management company;

“CMRU” means the Claims Management Regulation Unit;

“CMRU Notices” refers collectively to the Minded-to Letter and the Penalty Notice;

“FOS Questionnaires” means template questionnaires available from the Financial

Ombudsman Service into which information supporting a claim for redress for mis-sold

PPI may be inserted;

“FTT” means the First-tier Tribunal;

“Minded-to Letter” means the CMRU’s notice of proposed financial penalty dated 20 June

2017;

“Penalty Notice” means the CMRU’s notice dated 5 December 2018 under the 2006

Regulations notifying PPC that it was required to pay a £70,000 financial penalty;

“PPC” means Professional Personal Claims Limited;

“PPC Bank Websites” means the following websites while operated by PPC in around

2015-2016: www.barclays-ppi.co.uk; www.lloydstsb-ppi.co.uk; www.halifax-ppi.direct;

www.rbs-ppi.direct and www.natwest-ppi.direct;

“PPI” means payment protection insurance.

FACTS AND MATTERS

4.1.

The facts and matters below are a summary of those set out in the CMRU Notices.

Names of individuals have been redacted in the CMRU Notices reproduced as Annexes

A and B to this Final Notice.

4.2.

Between October 2015 and March 2017, the CMRU received 14 complaints against

PPC from clients of PPC and other parties who considered (inter alia) the design and

content of the PPC Bank Websites and of PPC’s documentation to be misleading.

4.3.

The PPC Bank Websites operated by PPC had the following domain names:

www.barclays-ppi.co.uk; www.lloydstsb-ppi.co.uk; www.halifax-ppi.direct; www.rbs-

ppi.direct and www.natwest-ppi.direct. In around 2015-2016, the PPC Bank websites

replicated the colour schemes traditionally used by the UK banks whose names

appeared in their domain names and prominently displayed the names and logos of

these UK banks.

4.4.

Once consumers had supplied their contact details and other information by means of

the PPC Bank Websites, PPC posted Claim Forms and other printed material to them.

The Claim Forms did not prominently identify PPC as the sender but prominently

displayed the names of major UK banks. The Claim Forms collected information from

consumers and set out the terms and conditions subject to which PPC would pursue

claims for redress for mis-sold PPI on their behalf.

4.5.

It was only after consumers had engaged PPC by signing the Claim Forms and

returning them to PPC that consumers received correspondence from PPC which

prominently displayed PPC’s own name rather than the name of any UK bank.

4.6.

Several of PPC’s clients and other consumers complained that they had been misled

by the PPC Bank Websites, Claim Forms and other conduct by PPC. Several PPC clients

complained that they believed they had submitted requests for redress for mis-sold

PPI directly to their banks and did not realise that they had in fact engaged PPC to

pursue redress claims on their behalf in return for payment of a fee.

4.7.

PPC did not fully cooperate with the CMRU’s investigation of its suspected misconduct.

When the CMRU requested “full” copies of several of PPC’s client files, PPC sent the

CMRU copies of its files from which the first and fourth pages of the Claim Forms had

been removed, without disclosing this fact to the CMRU. These omitted pages were

material to the CMRU’s investigation.

4.8.

The FOS Questionnaires reviewed by the CMRU which PPC had submitted to banks in

support of clients’ claims for redress for mis-sold PPI contained largely identical text

in section E under the headings “this page is for you to tell us what happened” and

“finally, tell us why you are now unhappy with the insurance”. The CMR concluded

that PPC had failed to present fully formed, accurate, detailed and specific complaints

to banks through the FOS Questionnaires. The CMRU found no evidence within PPC’s

client files to indicate that clients agreed with all the text that PPC had inserted into

the FOS Questionnaires which PPC submitted to banks on their behalf.

FAILINGS

5.1.

The CMRU found that PPC had breached Client Specific Rules 1(c) and 2 and General

Rule 2 of the CAPR.

5.2.

Client Specific Rule 1(c) provided that a business shall ensure that all information

given to the client is clear, transparent, fair and not misleading. The CMRU found that

PPC breached this rule through (inter alia) its use of the misleading PPC Bank Websites

and the misleading Claim Forms.

5.3.

Client Specific Rule 2 provided that all advertising, marketing and other soliciting of

business must conform to the relevant code, including the UK Code of Non-broadcast

Advertising, Sales Promotion and Direct Marketing (“CAP Code”). Rule 2 deemed

business’ websites to be advertising and required them to comply with the CAP Code.

Rule 3.1 of the CAP Code provided that marketing communications must not materially

mislead or be likely to do so. PPC breached these rules through its use of the

misleading PPC Bank Websites, as described above.

5.4.

General Rule 2 provided that “a business shall conduct itself responsibly overall

including, but not limited to, acting with professional diligence and carry out the

following: … b) Make representations to a third party that substantiate and evidence

the basis of the claim, are specific to each claim and are not fraudulent, false or

misleading”. PPC breached this rule because the FOS Questionnaires which it

submitted to banks contained allegations against banks which were not accurate, fully

formed, detailed and specific.

SANCTION

6.1

The basis on which the CMRU imposed the £70,000 financial penalty on PPC is set out

in the CMRU Notices which are reproduced in Annexes A and B to this Final Notice.

6.2

By virtue of article 53(2) of the 2018 Order, the CMRU’s Penalty Notice is to be treated

as a decision notice given by the Authority.

6.3

PPC has withdrawn its appeal to the FTT against the Penalty Notice.

6.4

The Authority hereby imposes on PPC a financial penalty in the sum of £70,000

pursuant to section 206 of the Act.

PROCEDURAL MATTERS

7.1

This Final Notice is given to PPC under and in accordance with section 390 of the Act.

Decision maker

7.2

The decision which gave rise to the obligation to give this Final Notice was made by

the CMRU, but under article 53(2) of the 2018 Order the CMRU’s Penalty Notice

recording that decision is to be treated as a decision notice given by the Authority

under section 208(1)(b) of the Act.

Manner and time for payment

7.3

The financial penalty must be paid in full by PPC to the Authority no later than 14 days

from the date of this Final Notice.

If the financial penalty is not paid

7.4

If all or any of the financial penalty is outstanding after a period of 14 days from the

date of this Final Notice, the Authority may recover the outstanding amount as a debt

owed by PPC and due to the Authority.

Publicity

7.5

Sections 391(4), 391(6) and 391(7) of the Act apply to the publication of information

about the matter to which this Final Notice relates. Under those provisions, the

Authority must publish such information about the matter to which this Final Notice

relates as the Authority considers appropriate. The information may be published in

such manner as the Authority considers appropriate. However, the Authority may not

publish information if such publication would, in the opinion of the Authority, be unfair

to you or prejudicial to the interests of consumers or detrimental to the stability of the

UK financial system.

7.6

The Authority intends to publish such information about the matter to which the Final

Notice relates as it considers appropriate.

Authority contacts

7.7

For more information concerning this matter generally, contact Matthew Hendin (direct

line: 020 7066 0236) of the Enforcement and Market Oversight Division of the

Authority.

Rob Gruppetta

Head of Claims Management Companies Department

Financial Conduct Authority

ANNEX A – CMR’S MINDED-TO LETTER WITH ITS ANNEXURES OMITTED

ANNEX B – CMR’S PENALTY NOTICE