Despite legislation in 2013 to outlaw ‘referral fees’, personal data is still being sold to ‘chasers’. Thousands of motorists are being hassled by nuisance calls from companies that have obtained details of claims made on car insurance policies.
It’s difficult enough seeing your classic being damaged after an accident, but worse when cold callers who’ve illegally obtained your details remind you of it while chasing you for personal information.
This problem should have faded following a change in the law in April 2013 that made it illegal for brokers and insurers to sell the data in exchange for referral fees. Yet the Information Commissioner’s Office (the ICO) said that in December 2014 alone it received more than 2000 complaints about unsolicited accident claims calls.
Malcolm Tarling of the Association of British Insurers said the passing on of data is not a practice they would condone: He said: ‘It has been outlawed and shouldn’t be done by insurers. Those who stand to benefit are the companies chasing up claims, who take a cut of any award or legal fees, so they pay to get information from various sources.’
However, CCW has learned that the traditional – but now sometimes illegal – path of information from broker to claims chaser still exists.
A motor insurance industry insider – who asked not to be named – said: ‘The outlawing of referral fees was clear, but people find ways through the legal detail. Claims chasers are giving remuneration towards brokers’ marketing costs instead of paying referral fees, but effectively the law is being ignored.
‘Each claim is worth about £1500 to the claims chasers, if you add up their cut of the car hire, legal fees and personal injury award. They’ll pay up to £500 for the information and small brokers have found that hard to live without.’
Databases used by the telemarketing industry are openly and legally for sale, containing information on everything from pensions to medical insurance, though car insurance claims would not normally be included. However, many other sources of ‘data loss’ can occur following a claim.
Brendan Ellison of claims specialist Kinderton’s Accident Management, explained: ‘We’re not in the business of passing on clients’ data, but we’ve noted that up to 13 different people or companies can be involved in a claim. For instance, as well as the insurance broker, the insurer themselves and the claims manager, details of the claim may have to be known by a recovery company, a repairing garage, an independent assessor, a salvage agent, a solicitor recovering loss of earnings or other damages, and an uninsured loss recovery company – a
similar thing but not legally trained.’
It is illegal for any of the links in the chain to sell on personal data without permission, yet convictions are rare. Two employees of Aviva have been prosecuted this year, with three employees of LV arrested in April. The Information Commissioner’s Office said: ‘The Data Protection Act requires that personal information be used in a fair and lawful way. This means that people should generally be aware of which organisations are sharing their personal data and what it is being used for.
‘In a broader sense, fairness also requires that where personal data is shared, this happens in a way that is reasonable and that people would be likely to expect and would not reasonably object to if given the chance.
‘Anyone who suspects their personal information has been traded illegally should report their concerns to us. We have the power to fine organisations that have breached data protection laws up to £500,000 in the most serious cases.’