UK's Financial Conduct Authority (FCA) published a statement urging law firms and claims management companies involved in a potential challenge to its motor finance redress scheme to consider the position of any clients who are also making motor finance claims. It emphasised that the scheme is intended to deliver fair compensation quickly and is free for consumers to use. For any firm involved in a challenge, the FCA said the minimum expectation is to write to affected clients explaining that the challenge is likely to delay compensation, offer them the option to exit their contract, and strongly consider waiving fees. The FCA said the scheme will put GBP 7.5bn back to consumers and that over 12 million agreements made between 2007 and 2024 are eligible for compensation, while its analysis indicates millions of those agreements did not involve the particularly serious misconduct identified in the Supreme Court case. For consumers, the FCA said they do not need to use a claims management company or law firm and warned that those who do may lose up to 36% of any compensation, with additional costs possible if pursuing court action. It also flagged complaint routes for dissatisfaction with FCA-authorised claims management companies (via the Claims Management Ombudsman) or Solicitors Regulation Authority-regulated law firms (via the Legal Ombudsman), and warned against signing with multiple representatives and against scams, including cold calls, texts or emails.
Financial Conduct Authority 2026-04-23
UK's Financial Conduct Authority tells law firms and claims firms challenging its motor finance redress scheme to warn clients and consider waiving fees
The UK Financial Conduct Authority issued a statement to law firms and claims management companies potentially challenging its motor finance redress scheme, instructing them to explain likely delays to clients, offer contract exits, and consider waiving fees. The authority reiterated that the free scheme is intended to return GBP 7.5bn to consumers, covering over 12 million agreements from 2007 to 2024, and warned that using representatives could reduce compensation by up to 36% and expose consumers to additional costs and scams.