FCA taskforce continues crack down on misleading car finance claims adverts

As part of the joint taskforce’s continued crackdown, in June the Financial Conduct Authority (FCA) had 170 misleading car finance claims  adverts removed or amended by claims management companies (CMCs), bringing the total up to 1,200 since January 2024.  

Some of the misleading adverts seen by the FCA were disguised as a consumer posting on social media recommending a website to look up agreements. However, the advert failed to make clear that it was a financial promotion for a CMC that was recommending its own website.  The adverts were using the FCA motor finance redress scheme in a misleading way to promote the firm’s own services, which could suggest an affiliation with the FCA, and also failed to clearly highlight free claim options and the FCA’s redress scheme. The adverts also promoted claims management services when not authorised to do so. 

The FCA also agreed to voluntary requirements (VREQs) with two firms, securing agreement that they would stop or change their marketing activities. This brings the total number of VREQs to 12 in relation to a range of motor finance claims activities over the last 12 months. The FCA also issued 8 alerts in June against unauthorised firms promoting regulated claims management activities without the necessary authorisation. 

Alongside this, the Advertising Standards Authority (ASA) has launched investigations into various motor finance claims ads placed by law firms. It is scrutinising a range of issues, including clarity around fees, the ability to claim for free via other routes, potentially exaggerated compensation amounts and consumers being potentially misled by ‘free checker’ tools. 

Alison Walters, Director of Consumer Finance at the FCA, said “Consumers should be able to trust the information they see about car finance claims. Too often, we are still seeing promotions that obscure key facts, create unnecessary pressure on consumers to sign up, or risk misleading people about their options.” 

Miles Lockwood, Director of Complaints and Investigations at the ASA, said ““The work of the taskforce is important, consumers should be treated fairly and be confident that the claims they see in ads for car finance schemes are transparent and truthful. Our investigations will root out problem claims, set clear lines in the sand for advertisers and trigger follow-up enforcement action where necessary.”