Claims management companies (CMCs) handle a range of claims for compensation or other benefits. Find out what to expect if you decide to use one and what your other options are.
CMCs are firms or individuals that can help you make a claim.
CMCs must be regulated if they provide services for claims concerning:
- financial services and products, eg PPI, payday loans, pensions and investments, and claims where you have purchased an item on your credit card and have suffered loss or damage in respect of the item (known as ‘section 75 claims’)
- personal injury
- employment matters, eg unfair dismissal
- criminal injury
- housing disrepair
- certain industrial injuries benefits
You don’t need to use a CMC to make a claim, it is free and simple to do it yourself. It's important to remember that CMCs will charge you a fee for their services.
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Why you might want to use a CMC
You might want to use a CMC if you think you’ll find it difficult to make a claim yourself. CMCs are likely to have the expertise to carry out the process more efficiently. They:
- can use their expertise in making claims
- should be able to advise you about the likelihood of your claim succeeding
- can investigate your claim and represent you
- can help you deal with any paperwork
- can put you in touch with lawyers, if your claim would benefit from legal advice or representation
The value you get from using a CMC may depend on the type of claim you are making and how easy it would have been to make the claim yourself.
Unfortunately, just because you think you have a claim doesn’t mean that you do, or that you'll receive any compensation. If your CMC doesn’t think that you have sufficient grounds to succeed, it should tell you.
Remember, if you decide to use a CMC, they will charge you for the service.
Some CMCs act as ‘lead generators’ only. Lead generators don’t help you make your claim, they simply identify any possible claims you might be able to make and refer you to other CMCs or lawyers who might help you make the claim. If a lead generator is involved in your claim, they may also be paid a fee by your CMC or lawyer for passing on your case.
You don’t have to use a CMC to make a claim. It's often possible to claim compensation yourself. The process for claiming compensation differs depending on the type of claim you are making.
Financial services and products
If you think you've been mis-sold a financial service or product, your first step will be to contact the relevant financial services firm. If you're not happy with their response, or if they don’t answer within 8 weeks, the Financial Ombudsman Service (the ombudsman) might be able to help you.
Find out more about the steps you can take to complain.
If a financial services firm fails, the claims process is different. In this case, the Financial Services Compensation Scheme (FSCS) may be able to pay you compensation.
Find out how to claim compensation if a firm fails.
Other types of claim
CMCs must be regulated if they want to provide claims management services for the claims listed above.
When they provide services relating to the types of claims on this page, CMCs are usually regulated by us (the FCA). But some CMCs, or other firms that provide claims management services, are regulated by one of the legal regulators instead. The legal regulators are:
- the Solicitors Regulation Authority (SRA)
- The Bar Standards Board
- CILEx Regulation
- the Law Society of Scotland
If you use a CMC make sure they are regulated by us, or one of the other legal regulators by searching the:
- Financial Services Register
- SRA Register
- Barristers’ Register
- CILEx Authorised Practitioners Directory
- Law Society of Scotland website
CMCs might provide services on other types of claims (such as aviation), but those services aren't regulated by us. If you're contacted by a CMC that you believe isn't regulated by us or the legal regulators, please contact us.
CMCs that are regulated by us must follow our rules. This means, for example, that they must:
- provide you with a 1-page summary of all the key information, before you sign a contract
- supply a detailed breakdown of how they will charge you, including examples. This may be called a 'cost illustration'
- offer a 14-day cooling off period during which you can cancel your contract without being charged
- update you on key developments with your claim, for example, if whoever is considering your claim has requested more documents
- tell you clearly about ombudsman schemes such as the Financial Ombudsman Service, or the relevant compensation scheme such as the FSCS, or any other official ways you can claim
- ask you to confirm that you do not want to make a claim by yourself for free, if you’re making a financial services claim
- clearly explain how to complain if you’re unhappy with the service they provide
They must not:
- send you emails or texts (unless you’ve agreed to receive them)
- make marketing calls to you unless you have specifically agreed to receive them
- approach you in person
- use any form of high-pressure selling such as asking for on-the-spot decisions
- charge you more than 20% plus VAT of your claim, if you're making a PPI claim which you started after 10 July 2018
Please check the individual legal regulators’ websites for information on what rules CMCs authorised by them need to comply with.
If you use a CMC, you will need to pay a fee. To make sure you get fair value for money, we’ve introduced a cap to the fees you can be charged for all financial services claims.
For claims started on or after 1 March 2022, the maximum fee you pay will depend on the value of your claim.
|How much you're awarded||Maximum % you can be charged||Maximum fee you can be charged|
|£1 to £1,499||30%||£420|
|£1,500 to £9,999||28%||£2,500|
|£10,000 to £24,999||25%||
|£25,000 to £49,999||20%||£7,500|
If you're unhappy about the way a CMC regulated by us has handled your case, find out how to complain.
If the firm is regulated by a legal regulator, please refer to the legal regulator’s website for information about how to complain.