A Claims Management Company (CMC) is a business that helps people make claims or complaints about various issues, such as personal injury accidents, unfair contracts, or disputes with financial services providers like lenders and insurers. In the UK, CMCs often advertise their services to motorists who have been in accidents or are dealing with motor finance problems.
For example, imagine you purchased a car under a Hire Purchase agreement but later discovered that the lender did not properly inform you about your rights before signing the contract. A CMC might offer to submit a complaint on your behalf for a fee. However, it's important to know that you can file such complaints directly without involving a CMC and at no cost.
The Financial Conduct Authority (FCA) regulates claims management companies in the UK. This means they must follow strict rules about advertising and handling customer complaints. The Consumer Insurance (Fraud Prevention) Act 2015 also requires CMCs to ensure that any insurance claim is genuine before proceeding.
It's crucial for consumers to be aware of these regulations because using a reputable and compliant CMC can help protect your rights, but it's equally important to know you have the option to handle things yourself. A practical tip: Always check if a CMC is registered with the Claims Management Regulator (part of the Ministry of Justice) before engaging their services. You can do this through their website or by asking for proof of registration directly from the company.
How This Relates to the FCA Redress Scheme
The FCA motor finance redress scheme covers 12.1 million agreements with an average compensation of £829 per agreement. The total cost to firms is £9.1 billion. If you had PCP or HP finance between 6 April 2007 and 1 November 2024, you may be eligible. The final deadline to complain is 31 August 2027. You do not need a claims management company.