Signed up to a car finance claims firm but unhappy with it? How to complain as new guidance issued

The Financial Conduct Authority (FCA) announced its major car finance mis-selling redress scheme earlier this year. The scheme is currently delayed until at least November due to various legal challenges, but if you're one of the millions due a payout under it, lenders will have to contact you directly and pay any redress owed. And it's still worth putting in a FREE complaint now, if you've not already done so, to speed up your payout.

This means there's no need to use a claims management company (CMC) or law firm for the FCA's scheme – if you do, it'll mean handing over 30% or more of your payout. (Though if you're considering the separate court route for mis-sold car finance, professional legal help could be worth looking at.)

Despite this, many have signed up with CMCs, prompting complaints about how those services were advertised. The FCA says it has "serious concerns" about how some CMCs and law firms have been operating and has issued new guidance, making clear that those who believe they've been misled or treated unfairly may be able to cancel agreements, reduce fees or even claim compensation.

When you might have grounds to complain to a claims firm or law firm

You should complain if you think you "have been signed up without consent, misled or treated unfairly", the FCA says. In practice, this could include:

• Being signed up without properly agreeing to it, feeling pressured into signing up, or having your details used without consent. This can include filling in a 'free compensation checker' or online tool without realising it was designed to sign you up to a claims firm.

• Being misled about the service, costs or chances of success. For example, through adverts exaggerating how much compensation you could receive.

• Letting you sign up without checking if you've already signed up with another firm.

• Not receiving information you should have been given before signing up. This includes:
  - A clear breakdown of any fees;
  - Your cancellation rights, including the 14-day cooling-off period;
  - A one-page summary of key contract information;
  - Free alternatives to its service, such as complaining yourself or using an official scheme;
  - Details of how to complain.

• Not being kept updated on the progress of your claim.

How to complain

If you think a claims firm or law firm has treated you unfairly, follow our step-by-step guide below to complain:

1. Download the FCA's new template complaint letter. This is designed for you to amend to include details of how you believe you've been treated unfairly or misled, before sending directly to the claims firm or law firm that you have an agreement with.

2. Explain what went wrong or wasn’t done properly, for example:
   - you were signed up without your consent
   - you weren't given the necessary information before you signed up
   - you were signed without confirming if you were already represented
   - the firm wants to charge a fee that seems to high for the work carried out.

3. Include any evidence you have to support your complaint. This could include details of emails, texts or letters, marketing messages, details of phone calls, contracts or terms & conditions. If you have any screenshots of ads or social media posts from the firm then include these too if you can (or mention details in your letter). You can also ask the firm to provide evidence, for example, that you consented to signing up, if you don't agree that you did.

4. Think about what you want the firm to do to remedy your complaint. If you were signed up without consent, misled or treated unfairly, the FCA says you can ask to cancel for free, get a refund of any fees you've already paid, or reduce or cancel a fee a firm is trying to charge. 

5. Not happy with the response? Escalate your complaint to the relevant Ombudsman. If the firm rejects your complaint, or you don't think it has resolved it properly within eight weeks, you can take it to the relevant Ombudsman for free (the firm's website or your paperwork should tell you the relevant ombudsman you'll need to go to):
   
   - Claims Management Ombudsman (part of the Financial Ombudsman Service) if it's FCA regulated.
   - Legal Ombudsman if it's regulated by the Solicitors Regulation Authority.
   
   If you were passed from an FCA-regulated claims firm to a solicitor, you may need to complain separately to each firm and then go to both Ombudsman.

Any exit fees must be 'reasonable'

If the firm wants to charge you to leave, the FCA says any fee must be reasonable and reflect the work carried out. As most car finance complaints are still at an early stage, any charge should broadly match the amount of work done so far (in other words, not much).

Even if you don't have grounds to complain about a claims firm's behaviour but simply want to cancel and pursue the claim yourself, any fee charged must still be reasonable.

If you think you're being asked to pay an unfairly high fee, the FCA has said you can ask for an "independent check" on exit fees by complaining and going to the relevant Ombudsman outlined in Step 4 above.

The regulator has ramped up its scrutiny of claims firms

In May, the FCA launched a market-wide review of claims firms, amid concerns that some firms are using misleading adverts, aggressive marketing tactics and signing people up without giving them the right information on what they're agreeing to.

So far, two firms have been named by the FCA as being under investigation: The Claims Protection Agency (TCPA), over worries about its advertising and sales tactics, and Consultation Claims Limited (CCL), over allegations that customers had been signed up without their consent and possibly had their signatures forged – though no findings have yet been made.

Meanwhile, another firm, Conclusive Financial Ltd – which also calls itself PCP Refunds – had its adverts banned in April after it used unauthorised clips of MoneySavingExpert.com (MSE) founder Martin Lewis.