The Financial Conduct Authority (FCA) announced on 9th September 2025 that it has reduced the number of promotions by claims management companies that exaggerated the compensation available to drivers following the rulings on motor finance fees.

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Nikhil Rathi, the FCA's Chief Executive informed the House of Commons Treasury Committee that since year, 400 promotions have been removed or modified due to unfair or inaccurate claims. Approximately  170 of these actions occurred after the Supreme Court's ruling on motor finance in August, indicating that the judgment has not deterred CMCs from soliciting clients.

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Rathi emphasized the FCA will take a strong stance against any regulated entity that provides misleading information to consumers regarding potential compensation. He reaffirmed the FCA's estimate that compensation payments are expected to average hundreds of pounds, not thousands.

 

They noted that law firms and CMCs continue to run high-pressure advertisements promising consumers around £4500 in compensation for unfair treatment when financing car purchases between 2007 and 2020.

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Rathi advised consumers to contact their lenders directly rather than engage with claims firms, which may take up to 30% of any compensation owed. FCA chair Ashley Alder stated that the goal is to design a scheme that offers consumers a fair outcome and a preferable alternative to court proceedings.

 

The FCA plans to release its consultation in the coming weeks and anticipates a significant number of compensation claims will be processed by 2026.