Financial Guidance And Claims Bill 2017
Published August 2017
The second reading of the Financial Guidance and Claims Bill took place in the House of Lords on 5 July 2017. The Bill, if passed into law has two objectives:
- Firstly, it will merge the three existing financial and pension guidance services paid for by the Government into a Single Financial Guidance Body (“SFGB”). The three existing services are: the Money Advice Centre, the Pensions Advisory Service and Pension Wise. The stated objective is part of an objective by the Government to “ensure that members of the public can access good-quality, free-to-client, impartial financial guidance and debt advice”.
- Secondly, the Bill will make changes to the regulation of Claims Management Companies (“CMCs”) who provide advice and services to assist people in making compensation claims for such things as personal injury and mis-sold financial products. These proposed changes follows the publication of an independent review in March 2016 which resulted in the Government stating it would change the regulatory system for CMCs to be achieved by transferring regulatory responsibility from the Ministry of Justice to the Financial Conduct Authority (FCA). . The Bill transfers complaints handling from the Legal Ombudsman to the Financial Ombudsman Service and the FCA would also be given the power to impose a cap on the fees that CMCs can charge for their services. The stated aim of the changes is that by transferring the regulator of CMCs to the FCA will protect consumers from malpractices such as “nuisance calls and [the] encouragement of fraudulent claims”.
The 2017 Conservative manifesto stated that a Conservative government would also consider a ban on companies “cold calling people encouraging them to make false personal injury claims”. In addition the manifesto stated a Conservative government would address “exaggerated and fraudulent whiplash claims”. It appears that this latter measure would be taken forward in a future ‘Civil Liability Bill’. However along with the talk of a 28 day breathing space to give people the chance to seek advice and deal with their debts effectively, the outcome of the recent general election means these provisions are now more likely to be matters to be reconsidered in the future, possibly!