Complaints About Claims Management Companies have become increasingly common as consumers deal with the complexities of car finance disputes. These companies, known for submitting complaints on behalf of consumers, can be a point of contention due to their fees and practices.
How Long Have CMCs Been Regulated?
Claims management companies (CMCs) operate in the background of many financial disputes, particularly those involving car finance agreements. Historically, these entities were regulated by the Ministry of Justice until April 2019 when the Financial Conduct Authority (FCA) took over their supervision. This shift marked a significant change in how consumers interact with CMCs and highlighted the importance of verifying whether a company is authorised to handle financial complaints.
Why You Do Not Need a Claims Management Company
Consumers often feel pressured into using a claims management company when they face issues with car finance agreements, but it's important to know that you can
complain directly to your lender for free. The FCA motor finance scheme covers an estimated 12.1 million eligible agreements (FCA, March 2026) and has provided approximately £7.5 billion in redress (FCA estimate) from 6 April 2007 to 1 November 2024. You do not need a claims management company to initiate this process; you can handle the complaint on your own.
What Do CMCs Typically Charge?
CMCs typically charge between 25-40% of any compensation received, plus VAT in some cases (FCA Register). This means that if a consumer receives an average £829 payout (FCA estimate), a CMC charging 30% would take £210, leaving the consumer with only £490. Given these costs, you should weigh whether using a claims management company is financially beneficial.
How to Verify FCA Authorisation
To ensure that you are dealing with an authorised and reputable entity, it’s essential to check if a CMC is registered with the Financial Conduct Authority (FCA). Here’s how:
1.
Visit the FCA Register: Go to the official FCA website at
https://register.fca.org.uk/s/
2.
Search for the Company Name: Enter the name of the claims management company you are considering.
3.
Review Authorisation Details: Look for confirmation that the company is authorised by the FCA and check if their registration status is current.
By following these steps, you can verify whether a CMC is legitimate and authorised to handle your complaint.
A Discretionary
Commission Arrangement (DCA) refers to an agreement where a car finance provider pays commission to a third party for the introduction of customers. This practice was often scrutinised, leading to redress schemes and complaints. Consumers who believe they were affected by unfair DCAs can still complain directly to their lender or through authorised claims management companies.
Sources and References
- Financial Conduct Authority (FCA). "Car Finance Redress Scheme." 2024.
- FCA Register. Available at: https://register.fca.org.uk/s/
- Financial Conduct Authority (FCA). "Motor Finance Redress Scheme Statistics." 2024.
By understanding the role of claims management companies and your rights as a consumer, you can make informed decisions about handling car finance disputes. Remember, you have the power to complain directly for free without incurring additional costs from CMCs.
Key FCA Figures
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.