Study shows that tide of CMC cold calls are showing no sign of abating
Two-thirds of drivers have received calls/texts from claim firms
12% willing to claim for injury not suffered
New laws to stamp out whiplash claims and cold calling ‘can’t come soon enough’
Drivers continue to be plagued by nuisance calls from claims management companies as the Civil Liability Bill, which seeks to stamp out ‘minor, exaggerated and fraudulent’ soft tissue (whiplash) injury claims, passed through its third reading in the House of Lords last week on Wednesday 27th June, new research from the AA has confirmed.
And, last year the Department for Digital, Culture, Media and Sport said it was going to beef up the powers of the Information Commissioners Office (ICO) to hold company directors directly responsible for cold-call offences rather than the firms themselves, through an amendment to the Financial Guidance and Claims Act. This was due by the end of June although it hasn’t yet happened.
Cold-call claims firms often masquerade as well-known and respectable organisations trying to persuade anyone who might have been involved in a past car collision that wasn’t their fault, to make a claim for ‘money owed to them’ for whiplash or other injuries.
According to the AA-Populus study of over 10,000 drivers, nearly two-thirds (63% - unchanged since 2016) say they have received such nuisance calls over the past 12 months, with half (55%) having never been involved any collisions – underlining the random nature of these calls.
Of those who have been contacted, most (88%) have been called on multiple occasions, 29% saying they have been on the end of such calls or texts more than 10 times over the same period.
Janet Connor, the AA’s director of insurance says: “This insidious tide of cold calls is a plague on our Members and change in the law can’t come soon enough.
“Over recent weeks around 80 people have told us that a firm claiming to be the AA, is contacting them, offering to make a personal injury claim on their behalf. The AA does not do this – and our legal team is taking steps to track down who’s responsible.
“Our survey shows that almost all (92%) consider such calls to be a nuisance and 63% believe the number of these calls is increasing, underlining the need for legislation to halt bad practice in the personal injury claims market.”
Apart from the ban on cold-calling, the government also proposes to increase the small claims track limit for personal injury claims from £1,000 to up to £5,000 meaning that the courts would not order legal costs to be paid by the losing party, up to that limit.
Says Connor: “Claims management firms exploit the present low limit knowing that their fees – which typically amount to around 80% of the compensation awarded – will be met, so it is in their interests to encourage people to make injury claims they otherwise would not have done.
“They tell potential claimants that it is ‘money owed to them’ by the at-fault driver’s insurance company.
“For some, it can be a way to make perhaps up to £5,000.
“That is clearly tempting, because while 87% consider making such a claim to be ‘morally wrong’, astonishingly 12% of those responding to the survey said that claiming for financial compensation is justified, even if they had suffered no injury.
“It’s this willingness to claim – especially under pressure – that has added to industry claims costs, and thus premiums, over the past year.”
But Connor points out that making claims for injuries that may not have been suffered is not a ‘victimless crime’ because injury and legal costs are met by increasing insurance premiums for everyone.
“Although it is important to ensure that those who genuinely suffer an injury in a car crash are properly compensated, cutting out spurious claims could potentially cut premiums by up to £30 according to government estimates.
“The insurance market is extremely competitive and if these costs were wiped out firms would reduce their premiums to reflect the savings made. After passing through its third Lords reading, the government announced it will introduce an amendment to ‘hold insurers to account’ in passing on savings.
“In anticipation of these changes to legislation, the AA’s most recent British Insurance Premium Index showed that premiums are already falling and I expect to see a further fall in the July Index.
But if any of the measures put forward in the Bill are blocked then premiums would start to go up again.”
Key findings from the research
Populus surveyed 10,293 AA members in its online poll between 13th-20th June 2018.
Q: Have you been contacted by a claims management firm encouraging you to make a claim ‘for money owed to you’?
63% have been contacted, of whom only 8% had actually been involved in a ‘no fault’ collision. Those in London (69%) were most likely to have been contacted by a claims firm
Q: How often do you estimate you have been contacted?
- Once – 7%
- 2 to 4 occasions – 35%
- 5 to 9 occasions – 24%
- 10 times or more – 29% Those in the North West of England (33%) and Northern Ireland (37%) are most likely to have been contacted more than 10 times
Q: Do you agree that the number of calls/text from claim firms seems to be increasing?
63% agree, 37% strongly so
Q: Claiming financial compensation following a no-fault accident is justified even if I suffered no injury
- 12% agreed (13% male, 10% female).
- Young drivers aged 18-24 are most likely to agree (21%).
- Regionally, those in the North East (16%) Yorkshire % Humberside (14%) West Midlands (14%) and East Midlands (14%) were most likely to agree
Q: Claiming financial compensation for an injury following a no-fault accident is morally wrong if you were not injured
87% agree (86% male, 88% female). Drivers aged 18-24 are least likely to think this (66%). Regionally, those in London (77%) and the North West (78%) are least likely to think this
Q: The government should take steps to ban cold-calling from personal injury claim firms
96% of people agree, 87% strongly. While the total is reasonably even across gender, age and region, those aged 18-24 were least likely to strongly agree (72%)