UK FCA urges CMCs to review financial promotions regarding motor finance claims

The UK Financial Conduct Authority (FCA) has published a letter dated 31 July, addressed to claims management companies (CMCs) involved with motor finance claims, urging them to review their financial promotions to ensure compliance with the FCA Handbook and standards set out under the Consumer Duty. The FCA has seen an increase in activity with CMC firms. From 1 January 2024 to 30 June 2025, the FCA's engagement with 14 authorised CMCs specialising in motor finance claims has resulted in 225 financial promotions being amended/withdrawn. The letter sets out the FCA's concerns regarding financial promotions across a range of media platforms, including websites, social media, banner advertisements and paid Google ads, that may breach the requirements set out in the Claims Management: Conduct of Business sourcebook (CMCOB) and the Consumer Duty.

Those concerns include financial promotions that: (i) exaggerate potential claim values; (ii) falsely imply that refunds have been secured or are guaranteed; (iii) create a false sense of urgency; (iv) indiscriminately suggest the contact relates to knowledge of a motor finance agreement of the consumers; and (v) sign-up consumers without their consent. The FCA believes that these practices have the potential to mislead consumers, particularly where the high claim amounts being promoted are highly speculative. The FCA reminds firms that promotions must be clear, fair and not misleading, and should avoid speculative claims or "clickbait-style" tactics.

The FCA asks firms to:

• Review and revise their financial promotions to ensure they are clear, fair and not misleading, including removing any references to exaggerated claim amounts and avoiding using terms such as "up to" unless they are accurately sourced, contextualised and not likely to mislead.
• Avoid misleading outcome guarantees. They must not imply that refunds or compensation are guaranteed or have already been secured. Firms must ensure that all promotional content must make it clear that eligibility and outcomes depend on individual circumstances and proper investigation.
• Avoid using language that implies a false sense of urgency.
• Monitor and update promotions regularly. Firms should conduct regular audits of live promotions to ensure ongoing compliance and promptly update or withdraw any materials that become non-compliant due to regulatory or legal developments.

The FCA will proactively monitor the market to assess compliance and confirms it will consider taking enforcement action as appropriate against any instances of non-compliance.

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