The FCA, Advertising Standards Authority, Solicitors Regulation Authority and Information Commissioner's Office are tackling the poor handling of motor finance claims by some claims companies and law firms.
As part of the joint taskforce's continued crackdown, in June the FCA had 170 misleading car finance claims adverts removed or amended by claims management companies (CMCs), bringing the total up to 1,200 since January 2024.
Some of the misleading adverts seen by the FCA:
- Were disguised as a consumer posting on social media recommending a website to look up agreements. However, the advert failed to make clear it was a financial promotion for a CMC that was recommending its own website.
- Were using the FCA motor finance redress scheme in a misleading way to promote the firm’s own services, which could suggest an affiliation with the FCA.
- Failed to clearly highlight free claim options and the FCA's redress scheme.
- Promoted claims management services when not authorised to do so.
The FCA also agreed to voluntary requirements (VREQs) with 2 firms, securing agreement that they would stop or change their marketing activities. This brings the total number of VREQs to 12 in relation to a range of motor finance claims activities over the last 12 months.
The FCA also issued 8 alerts in June against unauthorised firms promoting regulated claims management activities without the necessary authorisation.
Alongside this, the Advertising Standards Authority (ASA) has launched investigations into various motor finance claims ads placed by law firms. It is scrutinising a range of issues including clarity around fees, the ability to claim for free via other routes, potentially exaggerated compensation amounts and consumers being potentially misled by 'free checker' tools.
Alison Walters, director of consumer finance at the FCA, said: 'Consumers should be able to trust the information they see about car finance claims. Too often, we are still seeing promotions that obscure key facts, create unnecessary pressure on consumers to sign up, or risk misleading people about their options.'
Miles Lockwood, director of complaints and investigations at the ASA, said: 'The work of the taskforce is important, consumers should be treated fairly and be confident that the claims they see in ads for car finance schemes are transparent and truthful. Our investigations will root out problem claims, set clear lines in the sand for advertisers and trigger follow-up enforcement action where necessary.'
As part of a wider programme of work that focuses on financial ads, the ASA is harnessing its AI-based Active Ad Monitoring system to monitor ad claims at pace and scale to identify and tackle potential problems.
Joint taskforce members are continuing to take action against misconduct by CMCs and law firms that goes beyond misleading adverts. This could lead to further action against firms.
Advice to consumers
Using a CMC or law firm to make a car finance claim may mean paying fees of over 30% of any compensation.
If you haven't yet complained about car finance and you have concerns, you can complain directly to your lender for free. There is information on the FCA website, including the contact details for lenders.
If you have concerns about how you were signed up to a CMC or law firm, whether you were properly informed and gave consent, how your data was used, the handling of your case, or the fee charged to exit your contract, you should complain directly to the firm. The FCA has created a template letter (DOC) to help.
Avoid signing up with multiple claims firms, as this could result in paying multiple fees.
Notes to editors
- In June, the FCA reviewed 255 promotions across 83 authorised firms and wrote to 36 firms where it identified breaches of financial promotion rules or failures to meet expectations under the Consumer Duty.
- The FCA has issued 8 alerts against unauthorised firms:
- The FCA, ASA, Solicitors Regulation Authority (SRA) and Information Commissioner's Office (ICO) have joined forces to tackle the poor handling of motor finance claims by some lead generators, claims management companies (CMCs) and law firms.
- As a result of the FCA’s work, over 1,200 misleading adverts have been removed or amended since January 2024, more than 28,000 consumers have been able to exit contracts free of charge, and 3 CMCs reduced their unreasonable fees protecting over 500,000 consumers.
- The FCA recently banned adverts from a CMC which used edited, unauthorised clips of Martin Lewis, Money Savings Expert, to make misleading claims about average car finance compensation.
- The FCA has confirmed 2 enforcement investigations into The Claims Protection Agency Limited and Consultation Claims Limited.
- The ASA is harnessing its AI-based Active Ad Monitoring system to monitor motor finance claims ads at pace and scale to identify examples for a series of formal investigations and to create precedent for sector compliance action. Six formal investigations launched into advertising motor finance claims by law firms.
- The ICO has received over 12 million complaints from the public since September 2025 about nuisance calls, texts and emails and has multiple active investigations underway into CMCs and lead generators.