FCA Taskforce Cracks Down on Misleading Car Finance Ads

What the taskforce announced

A joint regulatory taskforce made up of the Financial Conduct Authority (FCA), the Advertising Standards Authority (ASA), the Solicitors Regulation Authority (SRA) and the Information Commissioner's Office (ICO) has confirmed continued enforcement action against misleading car finance claims advertising. In June 2026 alone, the FCA had 170 misleading adverts removed or amended by claims management companies (CMCs), taking the total number of adverts removed or amended since January 2024 to more than 1,200.

The taskforce was set up to tackle poor practice across the motor finance claims industry, following a surge in adverts and unsolicited approaches linked to the FCA's motor finance redress scheme, which covers Personal Contract Purchase (PCP) and hire purchase agreements taken out between 2007 and 2024. Alison Walters, the FCA's director of consumer finance, said consumers should be able to trust the information they see about car finance claims, but promotions are still obscuring key facts or creating unnecessary pressure to sign up.

The misleading tactics being targeted

The FCA identified several recurring tactics in the adverts it acted on in June. Some were disguised as an ordinary consumer's social media post recommending a website to check agreements, without making clear that the post was a paid financial promotion for a CMC recommending its own service. Others used the FCA's own motor finance redress scheme in a misleading way to promote a firm's services, potentially implying an affiliation with the regulator that does not exist.

The FCA also found adverts that failed to clearly signpost free claim options and the existence of the redress scheme itself, and cases of firms promoting claims management services without the required authorisation. Separately, the ASA has launched investigations into car finance claims adverts placed by law firms, examining issues including unclear fees, exaggerated compensation estimates, and potentially misleading "free checker" tools, using its AI-based Active Ad Monitoring system to review claims at scale.

What action has been taken so far

In June, the FCA reviewed 255 promotions across 83 authorised firms and wrote to 36 firms where it identified breaches of financial promotion rules or failures to meet the standards expected under the Consumer Duty. It also agreed voluntary requirements, known as VREQs, with 2 more firms, securing agreement that they would stop or change their marketing activity; this takes the total number of VREQs relating to motor finance claims activity to 12 over the past 12 months. The FCA issued 8 alerts in June against unauthorised firms promoting regulated claims management activities.

Since January 2024, the FCA says more than 28,000 consumers have been able to exit CMC contracts free of charge, and 3 CMCs reduced unreasonable fees, protecting more than 500,000 consumers in the process. The FCA has also confirmed 2 separate enforcement investigations into claims management companies, and previously banned adverts from a CMC that used edited, unauthorised clips of Martin Lewis to make misleading claims about average car finance compensation.

Why using a claims firm can cost you

The FCA's central message to consumers is that using a CMC or law firm to bring a car finance claim can mean paying fees of more than 30% of any compensation awarded, simply for a service that is available directly and free of charge. Signing up with more than one claims firm at once can also mean paying multiple sets of fees on the same claim, since firms do not always make clear that a claim can only be submitted once.

The ICO's involvement reflects the scale of unwanted contact linked to this sector: it has received more than 12 million complaints about nuisance calls, texts and emails since September 2025, and has multiple active investigations underway into CMCs and lead generators, the businesses that pass on consumer contact details to claims firms.

How to claim for free instead

Anyone who has not yet complained about car finance and has concerns can complain directly to their lender at no cost, using contact details for lenders published on the FCA's website. The FCA has also published a template letter for anyone who has concerns about how they were signed up to a CMC or law firm, including whether they properly understood and consented to the arrangement, how their data was used, how their case was handled, or the fee charged to exit a contract early; that complaint should go directly to the firm involved.

The FCA's advice is to avoid signing up with multiple claims firms for the same claim, since this can result in paying more than one set of fees on a single compensation payout, and to check whether a firm is authorised using the FCA's own register before engaging its services.

Frequently asked questions

Is using a claims management company necessary to claim car finance compensation?

No. The FCA says complaining directly to a lender is free, and using a CMC or law firm instead can cost over 30% of any compensation awarded.

What misleading tactics has the FCA found in car finance claims adverts?

Adverts disguised as ordinary social media posts, misuse of the FCA's own redress scheme to imply an affiliation, unclear signposting of free claim options, and firms promoting claims services without authorisation.

How many misleading adverts has the FCA taken action on?

Over 1,200 misleading car finance claims adverts have been removed or amended since January 2024, including 170 in June 2026 alone.

What happens after signing up with a claims management company?

Anyone with concerns about how they were signed up, their consent, their data, case handling, or exit fees should complain directly to that firm. The FCA has published a template complaint letter to help.

Does using more than one claims firm improve the chances of a payout?

The FCA advises against this, since signing up with multiple firms for the same claim can mean paying multiple sets of fees rather than improving the chances of success.