Statement

It is important to be aware that consumers entering claims in this sector may be in a vulnerable position. This is due to a variety of potential factors such as the impacts of poor housing, concerns about their family's health, their financial status, and differing awareness levels of how housing disrepair claims operate.

You must remember your regulatory obligations to act in clients' best interests and take account of their attributes, needs and circumstances. This includes undertaking due diligence to make sure anyone you use to source claims, such as referrers, is doing the same and abiding by our rules.

Our thematic review on the high-volume consumer claims sector found many firms had weak systems in place to check referrers are working in a way that is consistent with the firm's regulatory obligations. We have also received reports about prohibited marketing activity, including reports of clients being acquired by cold calling and door knocking.

Warning notices

• Read our warning notice on marketing services to members of the public and how law firms market to and acquire clients.

Key points for firms

• All marketing activity undertaken by yourself or those working on your behalf, must be accurate.
• You must give clients sufficient information to help them make informed decisions.
• You are prohibited from cold calling or making unsolicited approaches to attract claimants, or to accept referred clients acquired by these means from marketing companies, claims management companies or lead generators.
• Non-law firm businesses carrying out lead generation or other claims management must be authorised by the Financial Conduct Authority (FCA).
• Your commercial interests must not compromise your ability to comply with our Standards and Regulations.
• Referral arrangements must not conflict with acting in the best interest of your clients.

Our thematic review on the high-volume consumer claims sector also found many firms had inadequate client onboarding processes, including checks on client ID, sanctions and conflicts of interest. We were also concerned that some clients were getting inadequate advice about their claim's merits and prospects of success.

Read our helpful case studies and checklists for firms and solicitors from our thematic review.

Warning notices

• Read our warning notice that includes guidance on client onboarding.
• Read our warning notice on marketing services to members of the public.

Key points for firms

• You must have robust systems in place to identify clients and to make sure clients have given consent.
• Explaining the terms of your retainer to your client and getting their informed consent is fundamental. You must not act without client instructions.
• If onboarding online, such as via a website or social media, you must ensure that clients are properly informed about the retainer they are entering.
• Make sure clients have a copy of the retainer information, make their involvement clear, and obtain a form of client consent to your firm's instruction and record this on the firm's system.
• You remain accountable for compliance with our Standards and Regulations, even where onboarding is through third parties.

The Advertising Standards Authority (ASA) recently upheld complaints against group action law firms over misleading websites and online advertising.

Read the rulings:

• ASA Ruling on JLG Legal Ltd t/a Johnson Law Group
• ASA Ruling on Jones Whyte Law Ltd t/a Jones Whyte
• ASA Ruling on KP Law Ltd

The Information Commissioner’s Office (ICO) publishes enforcement action on its website.

• Enforcement action related to marketing practices