What do you need to know about the FCA change over?
Who are the FCA?
As of April 2019, the Financial Conduct Authority (FCA) has taken over regulation from the Claims Management Regulator (CMR). The FCA are essentially there to ensure that individuals and businesses get a fair deal when trading and if any claims arise. They say that “Financial markets need to be honest, fair and effective so that consumers get a fair deal” so, they regulate the conduct of over 58,000 busineses and ensure they are keeping to fair trading standards and rules.
The decision for the change over from the CMR followed a review in 2015 of Claims Management Companies (CMCs) regulation commissions. The government announced the switch and unlike previous years, these regulations will extend into Scotland too which is a significant change as until now no claims management companies in Scotland have ever been regulated before. This is a really positive step in the right direction.
What does this change to the FCA mean?
Now that the FCA are regulating claims management companies, it means that consumers can complain to the Ombudsman about any particular firms’ conduct. The FCA are very strict on the way claims management companies operate and aim to enforce that customers details are being properly protected as well as the consumer being treated fairly.
The new regulations mean that the claims management sector need to be able to help provide justice for their clients as well as provide a high quality and trustworthy service. To help put this in place, now before a customer decides they want to use any particular claims management company that company will need to provide the consumer with a document with a short summary. This summary must contain an overview of their services, any fees that may be charged, including advice on where to find free alternatives such as ombudsman schemes, and then any additional important information that may be of use.
The FCA vowed to be hard on any companies that break the rules and continue to ‘harass’ people that haven’t consented via phone calls or emails or texts. They will issue fines for such actions as well as any company using high-pressure or intimidating sales tactics or those companies who have not provided the consumer with the document containing all the information. Companies will now also need to keep records of any lead generation created by themselves or third parties. Therefore, any calls made by the company and their customers will have to be recorded and kept on file for at least 12 months to keep them accountable and honest.
The Executive director of supervision at the FCA Jonathan Davidson said ‘Today brings a new regime and rules for regulating the claims management industry […] The new regime has consumer protection and CMC professionalism at its heart. It will mean that customers will be protected from claims management cowboys and get a better deal’
What will change in timeshare law?
Any company working in claims will now have to go through the FCA authorisation process to be regulated – this includes any companies operating in timeshare law. These companies can apply for temporary permission but ultimately will need to go through a full regulation process to trade. This includes existing companies who are already trading and any new firms looking to set up. If there is anything at all about a certain firm that the FCA is suspicious about then they can and will stop them from working in particular sectors.
The FCA have tried to be transparent about the changes they will implement and why they will be doing it. New steps to provide a better service include changes to supervision, enforcement, consumers, competition and authorisation – summarised below.
- Supervision – this is the ongoing oversight of firms and individuals to reduce actual and potential harm to consumers and markets.The FCA will be taking precise and efficient action if any potential or actual harm is identified.
- Enforcement – the role of enforcement is to achieve fair and just outcomes in response to misconduct. The FCA will be identifying all CMCs behaviour and anything that may be dishonest, unlawful and failing to meet the FCA standards to ensure our rules and requirements are obeyed.
- Consumers – The FCA have a vision for well-functioning markets for consumers.They aim to address all concerns that are raised using a variety of tools that are used to protect consumers and their information.
- Competition – The FCA will be looking out for indicators of harm in the market. They will outline and diagnose any potential misuse in the industry and take action.
- Authorisation – The FCA will aim to assess the drivers of behaviour that can create a culture which is likely to cause harm. Anyone applying for authorisation – either a customers or company will be made to understand how they will have to comply with the regulations or risk facing fines and other disciplinary action.
In terms of timeshare law, these 5 changes will mean much stricter rules for the way timeshare claims companies operate. The aim is to put a stop to intimidating sales tactics and putting pressure on individuals without giving them all the information they need. If followed through properly, these new changes could mean that companies operating in harmful ways will now have a much closer eye on them and be forced to change the way they operate or risk fines or even stopping operating.
What does this mean for me?
At Athena law, we see these changes as very positive. Any new regulations which can protect consumers against fraudulent, harmful or intimidating behaviours is a positive step. We have been advising our clients for years to be alert to the potential for ‘cowboy’ companies operating within timeshare and claims and the FCA is aiming to help re-address the balance and provide customers with a fair, respectful outcome.
We hope this will put a stop to rogue companies who make false promises to customers trying to leave their timeshares and we will continue to work closely with all of our clients to understand their unique situation and frustrations.
We have years of experience in timeshare law and are fully regulated by the SRA. We are placed in a strong position to advise you on the next steps you can take. If you would like honest advice about your next steps then please do not hesitate to get in contact.
Call 0161 839 8847 today
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We look forward to hearing from you soon.