FCA warns against sale of customer data to claims handlers

The Financial Conduct Authority has warned company administrators and claims management companies after discovering that some administrators had tried to sell customer data to claims handlers.

The regulator said attempts to sell the data could happen before or after a company went bust and when it was likely that customers would make claims to the Financial Services Compensation Scheme.

It said customers were unlikely to have given their consent for their data to be shared and that doing so may be unlawful. Contact with customers by claims management companies may also be illegal, the FCA said.

The FCA said it and the Information Commissioner's Office found breaches of data protection laws such as the European GDPR data protection rules they would take action.

"Claims management companies are required to act honestly, fairly and professionally in line with the best interests of their customers," the FCA said. "CMCs using such personal data may not be acting in the customers' interests. CMCs seeking to rely on legitimate interest grounds for processing such data are highly unlikely to meet the requirements of the GDPR."