The Financial Conduct Authority confirmed on 6 May 2026 that it will review claims management practices, in a statement published alongside a separate update on Competition Act 1998 investigations. The announcement follows the FCA's 1 May statement on continuing legal challenges to its motor finance compensation scheme.
What the FCA announced
Two FCA notices in early May 2026 are relevant for consumers and authorised firms. On 1 May, the FCA issued a statement responding to legal challenges to the motor finance redress scheme it has been designing in the wake of the Supreme Court's earlier ruling on discretionary commission arrangements. On 6 May, a separate FCA statement confirmed a review of claims management company practices, alongside a press release on Competition Act 1998 investigations.
Why the claims management review matters
Claims management companies (CMCs) sit between consumers and firms in many financial redress scenarios — including PPI, packaged bank accounts, and now motor finance. The FCA already authorises CMCs and sets conduct standards under its Consumer Duty. A formal review signals that the regulator has concerns about practices that may be worth examining at scale, and the outcome could lead to new rules, fines, or restrictions on what CMCs can charge or how they market their services.
Motor finance — where things stand
The motor finance redress framework has been working its way through consultation and legal challenge. The FCA's 1 May 2026 statement confirms that legal proceedings are continuing. Firms with motor finance exposure — banks, captive finance arms, and specialist lenders — remain under regulatory scrutiny on historical commission practices.
| FCA action (April–May 2026) | Date |
|---|---|
| Statement on motor finance scheme legal challenges | 1 May 2026 |
| Three arrests in unlawful financial promotions investigation | 1 May 2026 |
| Cryptoasset firms — pre-application meetings open | 30 April 2026 (start: 11 May) |
| Charges against Shaun Lawrence — unauthorised mortgage broking | 30 April 2026 |
| APR review — whether they support consumer choices | 29 April 2026 |
| Competition Act 1998 investigations | 6 May 2026 |
| Claims management review | 6 May 2026 |
What consumers should do now
Anyone considering a motor finance complaint can complain directly to their lender for free, then escalate to the Financial Ombudsman Service if rejected. Engaging a CMC typically costs 25–30% of any compensation awarded plus VAT. The FCA's review may eventually tighten those terms, but the direct route remains available today.
What authorised firms should do
Firms with motor finance exposure should keep their senior accountability frameworks current and ensure customer outcomes data is being monitored under the Consumer Duty. CMCs themselves should expect renewed supervisory engagement and prepare evidence of fee transparency, success-rate disclosure and vulnerable-customer treatment.
Disclaimer
This article is general information about regulatory developments and is not legal or financial advice. Consumers should consider speaking to a qualified, FCA-authorised adviser or contacting the Financial Ombudsman Service directly.
Sources
- Financial Conduct Authority — News page (latest items, accessed 7 May 2026)
- FCA Statement — Legal challenges to motor finance scheme (1 May 2026)
- FCA Statement — Claims management practices review (6 May 2026)
