The Financial Conduct Authority (FCA)
is launching a £1 million campaign, letting motor finance
customers know they don't need to use a claims management company
(CMC) or law firm to access an industry-wide compensation scheme
the regulator is proposing.
As part of the campaign, which will
feature radio and online advertising, the FCA is teaming up with
influencers, such as Cameron (@cazza_time), to get the message to
consumers.
New 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 claims management company or
law firm if a redress scheme is introduced. Using a CMC or law
firm to make a motor finance claim could cost consumers around
30% of any compensation
paid.
Of motor finance holders aware of the
possibility of being owed compensation, 25% have already made a
claim and a further 39% intend to. Among those who have already
made a claim, just under half
(46%) did so using a claims management company or law
firm.
Over the next 2 months, a number of
influencers will be posting information for consumers on their
social media channels, including Instagram and TikTok. Online
video and radio ads will launch in
October.
Sheree Howard, Executive Director at
the FCA, said:
“We'll set out plans for a free,
easy-to-access motor finance compensation scheme. We're concerned
a significant number of people are unaware you don't need to use
a CMC or law firm to claim compensation. If you do, you could
lose over 30% of any money you're
owed.”
The FCA has recently warned consumers about scammers
pretending to be car finance lenders
and falsely claiming that people are owed compensation, despite
there being no car finance compensation scheme in place yet.
Consumers should hang up immediately and not share any
information if they receive calls like
this.
The FCA plans to launch a consultation on the compensation scheme in early October. If the
compensation scheme goes ahead, the first payments should be made
in 2026.
The FCA recently issued a
joint
statement with the
Solicitors Regulation Authority warning CMCs and law firms over
poor practices in motor finance commission claims. Concerns
include the volume and accuracy of marketing materials, and how
information is shared or verified when clients are passed on from
third parties. The FCA has also required CMCs to remove or amend
396 motor finance commission promotions between January 2024 –
August 2025.
Notes to
editor:
-
The survey was conducted by Critical
Research between 1st
– 12th August. An analysis
of the survey findings will be published when the consultation
launches in early October. Respondents consist of previous and
existing motor finance customers.
-
Consumers who are concerned that
they were not told about commission and think they may have
paid too much for their motor finance should complain now.
-
The FCA has posted a number of
Instagram videos answering key car finance questions,
including what consumers should do if they've already signed up with a CMC or law firm and
want to cancel.
