SRA and FCA warn claims managers over motor finance commission claims

The SRA and the FCA have put out a warning to relevant law firms and CMCs reminding them they must comply with the correct rules on handling motor finance commission claims. It warns that if, following the Supreme Court judgment, the FCA decides to put in place a redress scheme, claims managers should tell their clients about it, or the likelihood of it, and that the consumer could pursue claims through it free of charge. The regulators expect this to happen before a client signs any agreement with the claims manager, and that this expectation applies even if at the time the redress scheme has not been confirmed.

The regulators have become increasingly concerned about the conduct of some claims managers, be they law firms or FCA regulated CMCs, not least around failure to advise consumers of free-to-claim options and providing inaccurate or misleading information about the likely success or value of a claim. There has already been significant regulatory intervention action in relation to ads by these firms.