Claims Management Companies

Debate between Yvonne Fovargue and Jackie Doyle-Price

Thursday 8th November 2012 Westminster Hall

[Yvonne Fovargue (Makerfield) (Lab)]

It is a pleasure to speak under your chairmanship, Sir Alan. I, too, congratulate the hon. Member for Thurrock (Jackie Doyle-Price) on securing the debate. Ironically, it was a super-complaint by Citizens Advice that partly led to the establishment of a whole new industry—claims management companies—in which the practices are almost as bad as those that the complaint was intended to redress. .

Which?, the consumer organisation, has found widespread rule breaches by claims management companies and the use of misleading statements and unfair contract terms by a significant number of companies. Initially, however, I want to deal with an issue that I now know has affected all of us in this room—I am pleased that noble Lords are not exempt from it, either. I am referring to the aggressive marketing techniques of claims management companies. I myself have received a number of calls and texts promising me large sums of money. Actually, I was promised £3,251—more than most people here—by one company that phoned me. I found that very strange, for two reasons. First, I had never had payment protection insurance, and secondly, I am registered with the Telephone Preference Service and have been for a very long time—I was one of the first people to register with it.

However, on investigating, I was horrified to find out that the Telephone Preference Service has no enforcement powers. They are the responsibility of the Information Commissioner, and only recently has the Information Commissioner acquired the power to impose fines of up to £500,000. Therefore, consumers have not only to opt in to the Telephone Preference Service, but to complain to a different body. Although the Telephone Preference Service will pass on the complaints and has been doing so in ever-increasing numbers, the situation is still confusing for consumers. I and quite a number of other consumers would prefer an opt-out rather than an opt-in service in this regard, but I believe that there is sufficient evidence of abuse for the regulator to consider banning claims management companies from cold-calling. The consumer can find them if they want them. There are plenty of adverts on daytime television, as we have heard. I believe that those people who need them will know where to go.

I come now to my other pet hate—unsolicited texts. That form of communication is not covered by the Telephone Preference Service. I wonder whether we should consider widening the scope of the service to cover it. The Information Commissioner’s Office surveyed the public in 201, and out of more than 1,000 respondents, 681 said that receiving a text caused them concern; 205 said that it was inconvenient; and 61 said that it had caused them substantial damage or distress. That is a huge majority who dislike unsolicited texts even without including me—I get into an irrational rage over them at times. I would also like to see an opt-in for that form of communication and a single point of complaint. I do not want to forward spam texts to my mobile provider.

[Jackie Doyle-Price]

One difficulty with unsolicited texts is that they come from an anonymous source and if people try to ring the number that they have come from, it rings off. Surely we need to find a way of regulating that, so that someone can be held responsible for sending the text.

[Yvonne Fovargue]

I agree. Quite often, the texts are from abroad from what is almost a harvesting service. Although companies should not be sending unsolicited texts and making unsolicited phone calls, they will go back years and years and say, “Well, you gave us your details. You didn’t tick the box years ago to say that you didn’t want to receive marketing texts.” It is very hard to disprove that. There is a system whereby people can forward spam texts to their mobile provider to get them blocked, but there are different numbers for different mobile providers, and people have to remember the code to forward them and actually take action to do that. I do not want to do that; I just do not want to get the texts in the first place.