Dear temporary permission holder | Release Date: 4th June 2019
To read a longer summary of this Dear temporary permission holder letter, click here.
To access the original FCA document, click here.
Short Summary
The FCA’s letter to CEOs of Claims Management Companies (CMCs) outlines the stringent expectations and regulatory requirements essential for safeguarding customer interests. It emphasises the need for CMCs to obtain explicit consent from their customers through proper letters of authority before acting on their behalf, ensuring all actions are legitimate and in accordance with FCA regulations.
The letter highlights several concerns, including instances where CMCs act without appropriate customer authorisation, use fictitious customer details, or engage in claims where no actual relationship exists between the customer and the financial service provider. Additionally, there is concern over some CMCs’ financial promotions not adhering to regulatory standards.
CMCs are urged to reassess their operational and compliance strategies to confirm they align with FCA standards, particularly in the management of client consent and the accuracy of their financial promotions. The FCA points out that any shortcomings in these areas could influence the assessment of a CMC’s application for authorization and ongoing supervision.
Key Take-Aways and Actions:
CMCs must ensure that all activities and promotions comply with FCA regulations. They should immediately rectify any areas of non-compliance, particularly in obtaining proper customer consent and ensuring the authenticity of claims. The letter should be discussed at the board level, and CMCs are expected to collaborate closely with regulatory bodies to uphold standards and avoid potential enforcement actions. This proactive engagement is crucial to maintain trust and ensure the protection of consumer interests within the financial services sector.