Regulators launch joint taskforce to crack down on poor practice in motor finance claims

The announcement comes as the FCA prepares to set out its final compensation scheme for motor finance customers.

The regulators will step up efforts to share intelligence and continue to take co-ordinated and targeted actions using the full extent of their powers to mitigate harm to consumers. It will take swift action to tackle issues with unsolicited and misleading advertising, meritless claims, multiple representation, and unfair exit fees.

Alison Walters, director of consumer finance and FCA taskforce lead, said: 'Our scheme will be free and people don’t need to use a CMC or law firm. Should they decide to do so, it’s important that they can trust CMCs and law firms to act in their best interests. This taskforce will ensure we deal with problems quickly and decisively.'

Deb Jones, executive director of transformation and the SRA’s taskforce lead, said: 'We want consumers to have confidence in the system. The taskforce is a great example of how we as regulators can use our collective expertise and powers to not only take action, but also to improve consumers’ awareness of the standards they can expect from law firms and CMCs.'

Miles Lockwood, director of complaints and investigations at the ASA, said: 'It’s vital that ads promoting motor finance redress services are clear about the commitments and costs of engaging with a CMC or law firm. The ASA will take robust and proactive action to tackle misleading advertising of such services, working in partnership with other regulators as part of this taskforce.'

Andy Curry, head of investigations at the ICO, said: 'The law is long-standing, clear and simple – do not send unsolicited direct marketing without consent. We provide advice and support to help companies to comply, but where we see unlawful practices causing harm to the public, we will take action to the fullest extent. This is a serious issue, and we will work alongside our taskforce partners, pooling our expertise, knowledge and powers to address it.'

Advice for consumers

• The FCA’s motor finance redress scheme will be free to use. Consumers do not need to use a CMC or a law firm, and those who do may lose up to 30% of any compensation. If you decide to go through the courts, this may cost you more.
• Don’t sign up to multiple CMCs or law firms to represent you. Doing so may lead to multiple fees.
• Be cautious of potential scammers who may try to contact you via cold calls, texts or emails, claiming you are owed motor finance commission compensation or offering to check eligibility.
• Report nuisance calls and texts to the ICO[2] and report misleading advertising to the ASA[3]. 
• If a CMC is authorised by the FCA and you're unhappy with how it's handled your case, find out how to complain[4].
• If the firm is regulated by the SRA, find out how and where to complain[5]. Complaints for poor service or excessive fees should first be directed to the law firm, and can then be raised to the Legal Ombudsman.

Notes to editors

• The FCA will announce details of a motor finance redress scheme shortly after markets close on Monday 30 March.
• More FCA information for consumers[6], including how to deal with unwanted car finance emails[7].
• The SRA's website includes expectations for law firms[8] with regards to motor finance commission claims, and a guide for consumers who are represented by a law firm for a claim[9].
• Research commissioned by the FCA shows that 79% of motor finance customers are aware that they may be owed compensation and 61% of a possible compensation scheme. However, 41% of those aware they may be owed compensation didn’t know they would not need to use a CMC or law firm if a redress scheme is introduced.
• The taskforce is the latest measure by the regulators to improve standards. The FCA has already removed or amended 800 misleading adverts, in excess of 28,000 consumers have been able to exit contracts free of charge, and 3 CMCs reduced their unreasonable fees protecting over 500,000 consumers. Formal investigations are also under way, with 1 announced by the FCA.
• The SRA regulates more than 9,000 law firms in England and Wales. At 31 January 2026, it had 89 open investigations relating to 71 firms that manage high-volume consumer claims. It has also closed 7 firms working in this area.
• Previous joint statements:
  • FCA and SRA issue joint warning to firms representing motor finance commission claims[10].
  • Regulators join forces to tackle poor claims management practices[11].
  • SRA and FCA warn law firms and claims management companies over poor practices in motor finance commission claims[12].