If you’ve been chasing motor finance compensation, regulators have a warning about who you sign up with
People in Flintshire who may be owed motor finance compensation do not need to use a claims management company or law firm to get it, and four regulators have launched a joint taskforce to make sure those that do are not misled or overcharged.
The Financial Conduct Authority (FCA), Solicitors Regulation Authority (SRA), Information Commissioner’s Office (ICO) and Advertising Standards Authority (ASA) announced the taskforce on Monday, as the FCA prepares to set out the details of its motor finance redress scheme.
The scheme will be free to use.
Claims management companies (CMCs) and law firms that handle motor finance cases on a customer’s behalf can take up to 30% of any compensation received, the FCA says.
Research commissioned by the FCA found that 79% of motor finance customers are aware they may be owed compensation, but 41% of those people did not know they would not need to use a CMC or law firm if a redress scheme is introduced.
The taskforce will focus on unsolicited and misleading advertising, claims with no merit, customers being signed up with multiple representatives, and excessive exit fees.
The FCA says it has already removed or amended 800 misleading adverts relating to motor finance claims.
More than 28,000 consumers have been able to exit contracts free of charge, and three CMCs have reduced their fees, protecting more than 500,000 consumers.
Formal investigations are under way, with one publicly announced by the FCA.
The SRA, which regulates more than 9,000 law firms in England and Wales, had 89 open investigations into 71 firms handling high-volume consumer claims as of 31 January 2026.
It has closed seven firms working in this area.
Alison Walters, director of consumer finance and FCA taskforce lead, said: “Our scheme will be free and people don’t need to use a CMC or law firm.
“Should they decide to do so, it’s important that they can trust CMCs and law firms to act in their best interests.
“This taskforce will ensure we deal with problems quickly and decisively.”
Deb Jones, executive director of transformation at the SRA, said: “We want consumers to have confidence in the system.
“The taskforce is a great example of how we as regulators can use our collective expertise and powers to not only take action, but also to improve consumers’ awareness of the standards they can expect from law firms and CMCs.”
The ASA warned it would take action against misleading advertising of motor finance redress services.
Miles Lockwood, director of complaints and investigations at the ASA, said: “It’s vital that ads promoting motor finance redress services are clear about the commitments and costs of engaging with a CMC or law firm.
“The ASA will take robust and proactive action to tackle misleading advertising of such services, working in partnership with other regulators as part of this taskforce.”
Regulators also warned against potential scammers who may make contact by cold call, text or email claiming to check eligibility or offer compensation.
People who sign up with multiple CMCs or law firms risk paying multiple fees.
Anyone unhappy with how an FCA-authorised CMC has handled their case can complain to the FCA directly.
Complaints about law firms regulated by the SRA should be raised with the firm first, then with the Legal Ombudsman.
Check live fuel prices near you before you set off.
Spotted something? Got a story? Email news (@) deeside.com
NEW: Add Deeside.com as a preferred source on Google to see more of our trusted coverage when you search.
Latest News
