CMC Fees Explained - Why You Should Complain for Free
When dealing with car finance issues, it’s crucial to understand the financial implications of working with a
claims management company (CMC). At MLJ.org.uk (MLJ), we often receive inquiries about the fees associated with these companies and whether consumers can handle complaints independently. This article aims to clarify how CMCs operate, their typical fee structures, and why it might be more beneficial for you to
complain directly to your lender.
Why Consider Complaining Directly?
When dealing with car finance disputes, one key consideration is the cost involved in working with a CMC. These companies charge fees that can significantly reduce any compensation you may receive. For instance, a typical fee structure for a CMC might involve taking 25-40% of your compensation (plus VAT in some cases). On an average £829 payout (FCA estimate), a CMC charging 30% would take £210, leaving the consumer with only £490. This substantial fee can make it worthwhile to consider handling your complaint independently.
How Do Claims Management Companies Work?
Claims management companies submit complaints on behalf of consumers who feel they have been wronged in their car finance agreements. These companies often specialise in various areas such as
discretionary commission arrangements (DCAs), mis-selling, and other financial irregularities. While some CMCs may offer valuable support and expertise, it is important to weigh this against the significant fees they charge.
Why You Do Not Need a Claims Management Company
Consumers do not need to use a claims management company. In fact, you can complain directly to your lender for free. By handling the complaint yourself, you avoid paying high fees that could otherwise reduce your compensation. The Financial Conduct Authority (FCA) motor finance scheme covers 12.1 million eligible agreements (FCA, March 2026), with an estimated £7.5 billion total redress (FCA estimate) from 6 April 2007 to 1 November 2024.
How to Verify FCA Authorisation
Since April 2019, CMCs must be authorised by the Financial Conduct Authority (FCA). Before engaging with any claims management company, it is essential to verify their authorisation. You can do this by searching the FCA Register at
https://register.fca.org.uk/s/.
1.
Go to the FCA Register website: Visit
https://register.fca.org.uk/s/
2.
Enter the CMC name or reference number: Use the search bar to enter either the company’s full name or their reference number.
3.
Review the authorisation status: Ensure that the company is listed as authorised and check for any relevant information or warnings.
Sources and References
The FCA confirmed on 30 March 2026: 12.1 million eligible agreements, £829 average compensation per agreement, £7.5 billion total redress at 75% consumer uptake, and £9.1 billion total cost to firms. The scheme covers agreements from 6 April 2007 to 1 November 2024. Two deadlines apply: 30 June 2026 for post-2014 agreements and 31 August 2026 for pre-2014. Final complaint deadline: 31 August 2027.
You can complain to your lender directly for free. You do not need a claims management company.
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MLJ.org.uk (mlj.org.uk) is a free, independent information service. We are not a claims management company, solicitor, law firm, or financial adviser. We do not handle complaints, process claims, charge fees, or accept any percentage of compensation. This information does not constitute legal or financial advice. You can complain to your lender directly for free. You do not need a claims management company. If your lender rejects your complaint, you can escalate to the Financial Ombudsman Service at no cost. For personalised legal or financial advice, consult a qualified professional.