11:39 am, September 29, 2025
The Financial Conduct Authority (FCA) is facing backlash from private claims management companies ahead of a new ad campaign to discourage claimants from using their services.
In a series of online and radio adverts, the FCA is to advise car owners they will not need to use claims management companies or law firms to apply for their share of the regulator’s proposed £18bn compensation scheme, following a supreme court ruling in August that upheld consumer complains over commission paid to dealers
The regulator has hired online influencers including Cameron ‘Cazza’ Smith to tell consumers they will be able to apply for free, advising them against signing up to claims companies, which take as much as 30% of payouts in fees. It has said borrowers should expect no more than £950 for each complaint registered through its scheme.
An FCA spokesperson said: ‘Only around half of consumers know they don’t need to use a CMC or law firm to claim.
‘It’s important they’re equipped to make a choice and to understand that they could lose some of their compensation. That’s what our consumer campaign aims to do. Get people the facts so they can make their choice.’
But claims companies are saying the FCA has caved in to the big banks, which are trying to mitigate their compensation bills. Lloyds, the largest provider of motor loans through its Black Horse division, has already put aside a total of £1.2bn for redress under the scheme, Santander UK has allocated £295m and specialist lender Close Brothers has so far put aside £165m. The financial arm of BMW has ring-fenced £200m.
Darren Smith, managing director of Blackburn-based Courmacs Legal – a law firm that says it is handling 4m car finance claims – told The Guardian newspaper: ‘We have consistently called for a redress scheme that is fair, transparent, and puts consumers first.
‘Instead, the FCA appear to be prioritising the interests of big banks by pressuring victims to accept low-ball offers through their redress scheme, that may not reflect the full extent of the harm they have suffered.
‘Motorists should have a choice to engage lawyers, especially if they might get a significantly higher payout through the courts.’
