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CMCOB 6.3 Ceasing regulated claims management activities

Who and when?

CMCOB 6.3.1R
  1. (1)

    1CMCOB 6.3.3R to 6.3.6R apply to a firm:

    1. (a)

      which carries on any regulated claims management activities other than seeking out, referrals and identification of claims or potential claims; and

    2. (b)

      in respect of which it has been determined that the firm is to cease carrying on any of those regulated claims management activities.

  2. (2)

    CMCOB 6.3.7R applies to a firm:

    1. (a)

      which carries on seeking out, referrals and identification of claims or potential claims; and

    2. (b)

      in respect of which it has been determined that the firm is to cease carrying on that regulated activity.

  3. (3)

    The following provisions in CMCOB 6.3 apply to a firm with a claims management temporary permission as modified below:

    1. (a)

      the reference in CMCOB 6.3.3R(1) to 20 business days will apply provided that the period does not exceed 30 days;

    2. (b)

      the reference in CMCOB 6.3.5R to 40 business days must be read as 30 days; and

    3. (c)

      the reference in CMCOB 6.3.7(1) to 20 business days will apply provided that the period does not exceed 30 days.

CMCOB 6.3.2G

1Circumstances of it being determined that a firm is to cease carrying on a regulated claims management activity would include:

  1. (1)

    the governing body of the firm deciding to cease carrying on that activity;

  2. (2)

    the firm becoming insolvent or insolvency proceedings being commenced in respect of the firm; and

  3. (3)

    the FCA issuing a written notice under the Act or final notice removing or suspending the relevant permission.

Notifying customers

CMCOB 6.3.3R
  1. (1)

    1Within 20 business days of it being determined that the firm is to cease carrying on any regulated claims management activities, the firm must, in a durable medium:

    1. (a)

      notify each customer in relation to whom it carries on those activities that it is to cease carrying on the relevant activities;

    2. (b)

      explain to each customer what options are available for the customer to continue with their claim; and

    3. (c)

      notify each third party to whom the claim has been presented and (if different) each third party against which the claim has been made:

      1. (i)

        that the firm is to cease carrying on those regulated claims management activities; and

      2. (ii)

        of the identity of the person who will act for the customer in place of the firm (where the identity of that person is known).

  2. (2)

    In explaining to the customer what options are available to them to continue with their claim, the firm must include a statement to the effect of:

    1. (a)

      the statement in (3), if the claim is of a sort which may be made by the customer to a statutory ombudsman or a statutory compensation scheme without using the services of the firm and without incurring a fee; and

    2. (b)

      the statement in (4), if the firm is aware that the person against whom the claim is being or is to be made is a member of, or subject to, an alternative dispute resolution scheme (other than an ombudsman or a scheme of a sort mentioned in (a)).

  3. (3)

    The statement in this paragraph is that:

    1. (a)

      the customer is not required to use the services of a firm which carries on regulated claims management activity to pursue their claim; and

    2. (b)

      it is possible for the customer to present the claim themselves for free, either to the person against whom they wish to complain or to the statutory ombudsman or a statutory compensation scheme.

  4. (4)

    The statement in this paragraph is that it is possible for the customer to present the claim themselves to the alternative dispute resolution mechanism mentioned in (3)(b).

CMCOB 6.3.4G

1The guidance at CMCOB 3.2.8G also applies in respect of CMCOB 6.3.3R(2)(a).

Sending information and documents to customers

CMCOB 6.3.5R

1Within 40 business days of it being determined that the firm is to cease carrying on any regulated claims management activities, the firm must send to each customer whose claim has not been settled, withdrawn or discontinued all information and documentation the firm holds relating to their claim.

Passing customer details to third parties

CMCOB 6.3.6R

1If the firm passes the customer, or details of the customer or of the claim to a third party, with a view to that third party carrying on a regulated claims management activity in respect of the claim or the customer (or activity which would constitute such a regulated activity but for an exemption or an exclusion), the firm must promptly notify the customer in a durable medium:

  1. (1)

    that it has done so; and

  2. (2)

    of the identity and contact details of the third party.

Ceasing to carry on seeking out, referrals and identification of claims or potential claims

CMCOB 6.3.7R
  1. (1)

    1This rule applies in respect of a firm which has indicated to a customer that it will:

    1. (a)

      identify a third party to assist the customer with their claim; and

    2. (b)

      pass the customer’s details or details relating to the claim to the third party, or pass details of the third party to the customer,

    but has not yet done so and will not do so within 20 business days of it being determined that the firm is to cease carrying on seeking out, referrals and identification of claims or potential claims.

  2. (2)

    Within the time period referred to in (1), the firm must, in respect of each customer to whom it has made an indication of the sort described in (1) in a durable medium, notify the customer that it has not done so and explain why.