The Financial Conduct Authority has warned consumers about misleading social media adverts from claims management companies and law firms promoting motor finance claims. It said some adverts present paid promotions as impartial advice, misuse logos or public figures to imply endorsement, and fail to make clear that consumers can make a claim themselves for free. Firms must remove misleading content and take steps to put misled consumers back in their original position, which may include unwinding contracts at no cost. One firm has already agreed to take down all of its adverts. The warning sits within a joint regulatory taskforce response to poor practice in the market. The FCA said consumers do not need to use a claims management company or law firm to seek compensation, and that using one may cost more than 30% of any award. Reported problems include unwanted marketing, sign-ups without clear consent, difficulty leaving agreements, aggressive or unfair exit fees, and failures to explain free routes to the relevant Ombudsman. Consumers who were misled can complain directly to the firm, and any exit fee must be reasonable and reflect the work actually done. The FCA noted that most car finance claims remain at an early stage, so fees should match the limited work carried out so far. The FCA said it will take further action with regulatory partners. It also pointed to wider intervention already under way, including a review of the claims management market. Since January 2024, more than 1,000 misleading adverts have been removed or amended, more than 28,000 consumers have been able to exit contracts free of charge, three claims management companies have reduced unreasonable fees, 10 firms have accepted voluntary requirements, and the FCA has confirmed two enforcement investigations.
Financial Conduct Authority2026-06-08
Financial Conduct Authority warns on misleading motor finance claims adverts and tells firms to remove them
The Financial Conduct Authority has warned about misleading social media adverts by claims management companies and law firms promoting motor finance claims, including misuse of logos and public figures and failure to explain that consumers can claim for free. Firms must remove misleading content and may need to unwind contracts at no cost, with exit fees required to be reasonable. The warning is part of a wider intervention and joint regulatory taskforce response, under which the FCA has overseen the removal or amendment of over 1,000 adverts, enabled more than 28,000 consumers to exit contracts free of charge, secured fee reductions at three firms, imposed voluntary requirements on 10 firms, and opened two enforcement investigations.