FCA launches CMC market review

The FCA has announced a review of claims management practices, to establish the root cause of poor practices, following increasing concerns that CMCs and law firms are sometimes failing consumers. The FCA says that while recent focus has been on practices in the motor finance claims market, it is also concerned about other market segments, such as housing disrepair. And it feels the warnings it has sent out have not resulted in positive change.

The FCA will work with the SRA and other partners to focus on all firms that provide claims management services, or related services, whoever the regulator, to look specifically at:

• whether consumers get fair value, including whether price caps are fit for purpose, especially where free redress mechanisms exist;
• financial incentives, and whether these lead to conflicts of interest or poor conduct
• the customer journey end to end, including lead generation and marketing;
• whether firms have the right permissions; and
• whether differences between regulatory approaches affect firms’ behaviour.

The FCA will provide further information in the next couple of weeks.