Committee publication · Correspondence · 14 July 2026
Correspondence from the Claims Management Association on motor finance compensation scheme, dated 26 June 2026
From: Treasury Committee
Summary
The Claims Management Association writes to the Treasury Committee expressing concern that the FCA's response to the Committee's May 2026 letter on motor finance compensation inadequately addresses key questions and unfairly emphasises claims management firms rather than lenders responsible for mis-selling. The Association urges the Committee to press the FCA to prioritise consumer compensation without delay and hold lenders accountable.
Key findings
- Only around 140 firms held FCA permissions to advise on financial claims as of March 2026, with approximately 15 active in motor finance, constituting a small regulated sector
- The FCA's response does not fully address the Committee's questions and places disproportionate emphasis on claims management sector rather than regulated lenders whose practices caused the issue
- Continued delay in compensation has left claimants without redress, firms without income for completed work, and the process in confusion, with some consumers appointing multiple representatives due to stalled claims
- The FCA's current focus on reviewing claims management firms risks distracting from the central issue of lenders' responsibility for motor finance mis-selling and the urgent need for fair, practical, timely consumer compensation
- The FCA has regulated claims management since 2019 but appears increasingly detached from how the sector operates in practice
Tone
CriticalTopics
financial-regulationconsumer-protectionmotor-financecompensation
Key actors
Claims Management Association, Julia Cooper, Dame Meg Hillier, Financial Conduct Authority, Treasury Committee
Notable line
“… institutions. They should be regulated robustly, but they should not be treated as the principal cause of a scandal created by lender behaviour.”
Key Quotes
“… the response does not fully address several of the Committee's questions and places disproportionate emphasis on the claims management sector, rather than on the regulated lenders whose practices gave rise to this issue”
“They should be regulated robustly, but they should not be treated as the principal cause of a scandal created by lender behaviour.”
“… continued delay has left claimants without redress, firms without income for work already undertaken, and the wider process in confusion”
“… the FCA's current focus on reviewing claims management firms risks distracting from the central issue: lenders' responsibility for motor finance mis-selling and the urgent need for a fair, practical and timely route to consumer compensation.”
Source · parliament.uk record ↗