CSC member firms fall foul of SMS crackdown

09/09/2010

Two members of the Claims Standards Council have been forced out as a result of an investigation into the sending of unsolicited text messages.

The move follows the Ministry of Justice’s statement that it had closed down its 200th “rogue” claims management firm following a series of investigations.

Post revealed in June that one CSC member was under scrutiny by the MoJ, due to the proliferation of text message marketing to attract personal injury claimants.

Another former member that cannot be named for legal reasons, is also being investigated by the MoJ’s claims management regulation unit, and is expected to be closed down.

Andrew Wigmore, CSC policy director, said the organisation will continue to oppose illegal marketing activity by its members.
Mr Wigmore described the latest firm under investigation as “prolific” in its use of unsolicited text messaging, adding: “It will be stopped. The text messaging activity from this firm at present will come to a head sooner rather than later.”

One industry insider told Post the issue of ‘text pests’ is not expected to be a key feature of the report into UK compensation culture and health and safety, due to be published by Lord Young of Graffham within the next few weeks.

Referral fees, often cited by insurers as one of the key incentives for claims farming, are also set to be widely ignored in the report, according to industry sources who have seen preliminary copies.

No let-up on text pests from MoJ

The Ministry of Justice has vowed to continue shutting down “rogue” claims management companies.

Head of the department’s claims management regulation unit Kevin Rousell, pictured, told Post the department had worked with trade bodies including the Insurance Fraud Bureau and Association of British Insurers to combat text pests: “There are always businesses that try and get around the rules. If the companies using text messages are found, the problem moves on somewhere else. It is not good for consumers or the financial services market.”

Mr Rousell added its investigations would remain challenging, with several insurance companies also understood to sell information. “Some data seems to be coming from insurers as well,” he noted.

Mark Brill, chair of the Direct Marketing Association’s mobile council, welcomed the announcement: “We have seen an increase in these text messages to near endemic proportions, so it is encouraging to see the regulator taking action. Mobile is one of the most personal devices we have, and spam SMS are regarded by consumers as an invasion of that space.”

Original Article: Post