FCA and SRA claims warning

The Financial Conduct Authority (FCA) and the Solicitors Regulation Authority (SRA) have issued a joint warning to claims management companies (CMCs) and law firms involved in motor finance commission claims.

The regulators say they are seeing cases where consumers have instructed multiple representatives for the same claim, in some instances up to four. This creates a risk that consumers may face multiple termination fees if they attempt to cancel duplicate agreements, which could be considered excessive or unfair.

The FCA and SRA have reminded firms that they are expected to have robust checks in place to ensure a consumer has not already instructed another representative before taking on a claim. The FCA has also written separately to lenders, outlining the steps they may need to take to help address this issue.

For FCA-regulated CMCs, fees must represent fair value in line with the Consumer Duty. Following FCA scrutiny, two FCA-regulated CMCs have already agreed to amend their termination fee policies.

The FCA is currently considering the responses to the Motor Finance Consumer Redress Scheme (CRS) consultation. It has said it will publish the final scheme rules by the end of March 2026.

FCA and SRA joint message to professional representatives on motor finance commission claims: dealing with multiple representation and excessive termination fees | FCA

See the BVRLA’s Commission Disclosure resource hub.