UK Regulators Launch Joint Taskforce to Crack Down on Motor Finance Claims Malpractice

A coalition of UK regulatory bodies has launched a joint taskforce to combat poor practices by claims management companies (CMCs) and law firms handling motor finance commission claims. The initiative brings together the Financial Conduct Authority (FCA), the Solicitors Regulation Authority (SRA), the Information Commissioner’s Office (ICO), and the Advertising Standards Authority (ASA). The taskforce will focus on intelligence sharing and coordinated enforcement to eliminate harms including unsolicited and misleading advertising, meritless claims, duplicate representation, and unfair contract exit fees. The coordinated approach arrives as the FCA prepares to publish the details of its formal compensation scheme for motor finance consumers shortly after markets close on Monday, 30 March. Regulators stressed that the upcoming FCA redress scheme will be completely free for consumers to access directly. FCA research indicates that while 79% of motor finance customers know they might be eligible for compensation, 41% of those aware did not know they could claim without hiring a CMC or legal representative. Regulators warned that using a CMC or law firm could cost consumers up to 30% of their compensation payout, or more if pursued through the courts. Enforcement actions against predatory claims practices have already produced significant results. The FCA has amended or removed 800 misleading advertisements, facilitated free contract exits for over 28,000 consumers, and intervened with three CMCs to reduce unreasonable fees, protecting more than 500,000 customers. One formal investigation by the FCA is currently underway. In parallel, the SRA, which oversees more than 9,000 law firms across England and Wales, reported that as of 31 January 2026, it had 89 open investigations into 71 firms managing high-volume consumer claims, and had already shut down seven firms operating in this sector. The ICO and ASA have also pledged to utilize their full statutory powers to stop unlawful direct marketing and misleading promotional claims.