The compensation claims industry has taken just over a decade to get from the original burst of craziness to the steady market it is today. Despite government claims of successful intervention, the industry itself had settled down considerably and was already on its way to a sensible, self-regulated co-operating network of individuals.
Sadly, as with the FSA and finance - the introduction of regulation by the MOJ over claims companies has yet to bear any discernible fruit. Just like finance companies that bear the mark of the FSA only to run away with your life savings - claims management companies still run rampant. Cold-calling, incessant texts and people being paid to make claims are part of daily life in the UK.
As we wondered where the line actually was, we developed a quick online game to demonstrate a point that is far past the line in the sand.
>> PLAY NOW << (opens in a new window)
So where is the line for advertising claims services? When does pointing out a consumer's rights become encouraging fraudulent or frivolous claims?
Online compensation calculators say they indicate how much compensation is due for any particular injury. The calculations on this are unlike mortgage or loan calculators which use the provider's own privately decided rates. Compensation calculators cannot do this because the amount of compensation you receive depends on how the injury was sustained, who the third party are, whether they are insured, the scope of the injury, the knock-on effects of the injury etc.
Obviously, these things cannot be estimated. They must be investigated through accident advisors, police reports, doctors and more. Therefore any calculator can only work on average payouts. With a whiplash injury being anything from £1,500 to £15,000+, what is the actual use or informative nature of compensation calculators stating how much you could get if you claim?
On the right, you can see a snapshot of a page from a claims management company called ClaimFree.co.uk who provide such a calculator. This page has been in existence for about 4 years as far as we have seen.
Is telling people that damaged hair can net you up to £15,000 compensation:
a) making a consumer aware of their rights?
b) encouraging people to have-a-go at claiming?
Claims company branding has become curious also. Above you can see three branding attempts in this market.
As solicitors have very strict guidelines on how they operate and appear, some have set up sideline marketing companies who then "sell on" claims to the solicitors firm. The image of the originating solicitor's practice is therefore protected.
Most of the time, claims management companies have been set up by third party individuals to sell claims to solicitors. Many have no legal training and if things go wrong, they can close down a website start a new one the next day.