Scope of joint regulatory taskforce with the FCA, Solicitors Regulation Authority (SRA), Information Commissioner's Office (ICO) and Advertising Standards Authority (ASA).
The joint regulatory taskforce (taskforce) has been set up to tackle the poor handling of motor finance claims by some claims management companies (CMCs) and law firms.
The taskforce brings together regulators to deliver bold, swift and visible action, using the full suite of regulatory and supervisory tools across organisations.
Regulatory actions will be progressed, with outcomes communicated jointly, signalling a unified regulatory response and clear expectations for market behaviour.
Objective
The taskforce is focused on restoring consumer confidence by tackling poor practices and addressing systemic behaviours that distort incentives, delay compensation and erode trust in the consumer claims sector.
Key harms
Based on existing intelligence and previous regulatory action, the taskforce will focus on the following priority harms:
- Multiple representation, resulting in uncertainty for firms, and increased risk of unfair outcomes for consumers, including delayed or blocked redress.
- Misleading advertising and misleading sign-up processes, including poor pre-contractual disclosure.
- Unsolicited direct marketing and high pressure selling.
- Meritless and speculative claims.
- Unreasonable exit fees, which are not fair and proportionate.
- Unauthorised lead generation and misuse of consumer data.
- Misappropriation of or weak controls around client money and timely payouts.
- Disruptive behaviours that could delay redress to consumers.
- Weak financial and operational resilience including, but not limited to, the quality and integrity of accounting and audit practices, and the ability to deal with large volumes of claims.
- Poor fraud controls.
- Funding models that create incentives misaligned with consumers' best interests.
Next steps
The taskforce will run for a minimum of 6 months followed by a review of progress.