FCA and SRA publish joint statement to representatives involved in motor finance claims
The FCA and SRA have published a joint statement warning firms involved in motor finance claims about the risks of clients having multiple representatives and facing excessive termination fees. The statement sets out clear expectations on onboarding, communication, and managing duplicate claims.
The Financial Conduct Authority ("FCA") and Solicitors Regulation Authority ("SRA") have published a joint statement urging claims management companies and law firms involved in motor finance claims to ensure that clients do not have multiple representatives for the same claim.
The warning follows instances of clients having up to four different representatives for the same claim, putting them at risk of being charged (potentially excessive) termination fees (should they try to cancel duplicate agreements), as well as creating confusion for consumers and operational strain on firms receiving claims.
The SRA confirms that it will act where it sees misconduct or the unfair treatment of clients, noting that as of 31 January 2026, it had 89 open investigations relating to 71 law firms that manage high-volume consumer claims. It has also closed seven firms.
Multiple representatives
- Ensure that clients make informed decisions before starting work on their cases
- Clearly communicate any termination fees
- Undertake appropriate due diligence at the onboarding stage (including checks to ensure that clients are not already represented); and
- Ensure that clients are not misled into unknowingly entering new agreements.
- Immediately inform the client and explain the implications (including any termination fees)
- Advise the client of their options for progressing the claim and take steps to ensure that the client understands those options; and
- Support the client in transferring files (if the client chooses to proceed with another representative), and consider writing to the respondent to confirm they are no longer representing the client.
- Conduct thorough onboarding checks
- Ensure clients have terminated any previous agreements and made an informed decision to proceed
- Confirm their instruction in writing to all parties (including any previous representatives); and
- Clearly explain to the client the implications of entering multiple agreements.
- Resolve any issues urgently and in partnership with firms progressing claims
- Engage with the client and any other representatives to confirm how the client would like to proceed
- Notify the respondent of which single representative is going to be taking the claim forward; and
- Consider whether any termination fee is appropriate and justifiable.
Termination fees
The joint statement provides that representatives should review termination requests and assess whether any proposed fee is fair, reasonable and justified. This includes considering factors such as the adequacy of the onboarding process, the actual work completed and also the prospects of the claim had the contract not been terminated.
Next steps
In addition to the joint statement, the SRA has updated its Claims Management Activity guidance to address the issue of multiple sign-ups.
The FCA is expected to publish its policy statement and the final rules for a motor finance redress scheme early this year (see our previous article here for further details of the proposed scheme). In the meantime, the FCA and SRA's warning makes clear that representatives dealing with motor finance claims must act responsibly and review their processes to ensure they are managing claims in compliance with their regulatory obligations.
If you would like to discuss the issues raised in this article in more detail, including issues relating to commission arrangements and / or "secret commissions" claims more generally, please get in touch with Terence Dickens or with Gena Ritchie.
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