Claims management companies (CMCs) are everywhere right now. Texts, cold calls, Facebook ads, Google ads — all promising big payouts from the FCA's Motor Finance Consumer Redress Scheme. They'll handle everything for you, they say. All you have to do is sign up and let them take care of the paperwork.
What they don't always mention upfront is the price. CMCs typically take between 25% and 50% of your payout as their fee. On the FCA's estimated average payout of £829, that's £200 to £400 gone — for filling in a form you could complete yourself in about 10 minutes.
The FCA has deliberately designed the Motor Finance Consumer Redress Scheme (PS26/3) to be simple enough for anyone to use, for free. This article gives you an honest, detailed comparison of claiming yourself versus paying a claims company, so you can make an informed decision about what's right for you.
Before You Start
1. The FCA says you don't need a claims company. The regulator's own guidance explicitly states: "There is no need to use a claims management company or law firm." The scheme was built for consumers to use directly, with free tools and template letters provided.
2. Understand how CMCs charge. Claims management companies are FCA-regulated and cannot charge upfront fees. Instead, they take a percentage of your payout — typically 25–50%, with 30% plus VAT (36% effective) being common. You only pay if you receive compensation, but the percentage can be substantial.
3. The DIY process takes about 10 minutes. You can use the FCA's searchable lender list, their free template complaint letter, or MoneySavingExpert's free online tool. No specialist knowledge is required.
1. The Cost Comparison
This is the most important factor. DIY costs nothing. A claims company takes a percentage of your money. Here's what that looks like at different payout levels:
| Your Payout | DIY (Free) | CMC at 25% | CMC at 30%+VAT (36%) | CMC at 50% |
|---|---|---|---|---|
| £500 | £500 | £375 | £320 | £250 |
| £829 (avg) | £829 | £622 | £531 | £415 |
| £1,500 | £1,500 | £1,125 | £960 | £750 |
| £2,500 | £2,500 | £1,875 | £1,600 | £1,250 |
| £5,000 | £5,000 | £3,750 | £3,200 | £2,500 |
On the average payout of £829, a CMC charging 30% plus VAT would take £298, leaving you with £531. That's £298 for completing a form that takes 10 minutes.
2. What a Claims Company Actually Does
Understanding what a CMC does (and doesn't do) is essential to making an informed choice. Here's the reality:
- They fill in a form or template letter — the same one available free from the FCA or MoneySavingExpert
- They submit it to your lender — using the same channels you would use
- They follow up on your behalf — but the lender has the same deadlines regardless of who submits the complaint
What they cannot do:
- Speed up the assessment process — lenders have fixed FCA deadlines
- Access special complaint channels unavailable to consumers
- Influence the redress calculation — the FCA scheme uses fixed rules
- Get you a higher payout than DIY — the lender applies the same formula either way
3. The DIY Process (Step by Step)
Here's exactly how to claim for free. The whole process takes about 10 minutes:
- Go to the FCA lender list at fca.org.uk/consumers/car-finance-complaints/list-lenders
- Search for your lender by name (e.g., Black Horse, MotoNovo, Close Brothers, Santander Consumer Finance)
- Click through to the lender's complaint form or download the FCA template complaint letter
- Fill in your details — name, address, agreement number, and the date of your agreement
- Submit via the lender's preferred method (online form, email, or post)
- Save a copy of everything you send — screenshot, email confirmation, or recorded delivery receipt
Alternative: MoneySavingExpert offers a completely free complaint tool at moneysavingexpert.com/reclaim/reclaim-car-finance/. Over 3.6 million complaints have already been sent through it. You answer a few questions and it generates and submits the complaint for you — at no cost.
4. When a Claims Company Might Be Worth It
To be fair, there are a small number of scenarios where using a CMC could make sense:
- You have multiple complex cases across many lenders and genuinely cannot manage the admin — though each complaint is still just a simple form
- You have accessibility needs that make completing online forms or writing letters difficult, and you don't have someone who can help you for free
- Your claim has been rejected and you need help escalating to the Financial Ombudsman Service (FOS) — though FOS escalation is itself free and straightforward to do yourself
- You have a genuinely unusual or complex case that falls outside the standard scheme — this is rare
Even in these scenarios, consider whether a friend, family member, or Citizens Advice could help you for free before signing up with a CMC.
5. Aggressive Marketing Tactics to Watch For
CMCs spend heavily on marketing. Here are the common tactics to recognise:
- Cold calls and unsolicited texts — If you didn't give consent to be contacted, this may breach GDPR. You can report these to the Information Commissioner's Office (ICO)
- Fake deadline urgency — Messages claiming "you must act NOW" or "deadline expires this week" are misleading. The final deadline is 31 August 2027
- Claims of "specialist knowledge" — The standard scheme doesn't require specialist knowledge. The FCA template letter does the work for you
- Social media ads with inflated payout figures — Ads showing £5,000+ payouts represent the high end. The FCA's estimated average is £829
- Door-to-door sales — Some CMCs send representatives to your home. You are under no obligation to let them in or sign anything
6. What the FCA Says
The Financial Conduct Authority, which designed and regulates the Motor Finance Consumer Redress Scheme, has been clear on this point. The FCA explicitly states that consumers do not need to use a claims management company or law firm to make a complaint.
The FCA has provided:
- A searchable lender database so you can find your lender's complaint form in seconds
- Free template complaint letters that you can download, fill in, and send
- Clear deadlines so you know exactly when to act
- A consumer-friendly scheme design that requires no specialist knowledge
The scheme was built so that ordinary consumers could use it without professional help. The FCA would not have designed it this way if they expected people to need a CMC.
7. How to Spot a Dodgy Claims Company
Not all CMCs operate ethically. Watch for these red flags:
- Not FCA-registered — All legitimate CMCs must be registered with the FCA. Check at register.fca.org.uk
- Asks for upfront payment — This is illegal for CMCs. They can only charge a percentage of your payout after you receive it
- Pressures you to sign immediately — Legitimate companies give you time to consider. High-pressure tactics are a warning sign
- Won't clearly state their fee percentage — Before signing, you should know the exact percentage including VAT
- Contacts you unsolicited — If you didn't request contact, be suspicious
- Claims they can get you more money than DIY — This is misleading. The FCA scheme uses fixed rules applied by the lender, not the complainant
- Upfront fees for claims management services are illegal under FCA rules
- Report the company to the FCA at fca.org.uk/consumers/report-scam
- Also report to Action Fraud on 0300 123 2040
8. Already Signed Up With a Claims Company?
If you've already signed a contract with a CMC, here's what you need to know:
- 14-day cooling-off period: You have 14 days from the date you signed to cancel without any charge. This is a legal right under the Consumer Contracts Regulations 2013
- After the cooling-off period: Check your contract terms carefully. Some CMCs charge a cancellation fee or may still claim a percentage if work has already been done on your case
- If the CMC hasn't submitted your complaint yet: You may be able to cancel and submit it yourself for free. Contact the CMC in writing to request cancellation
- If you're unsure about your rights: Contact Citizens Advice for free guidance on your specific contract
Thinking of changing your car?
Browse verified used car listings on SortedCars.
- Signing up without checking the fee percentage — Always ask for the exact rate including VAT before you commit
- Believing a CMC can get you more money — The FCA scheme uses fixed redress rules. A CMC cannot influence the calculation
- Thinking the process is complicated — It's a simple form or template letter. If you can shop online, you can do this
- Responding to cold calls on the spot — Never sign up during an unsolicited call. Take time to research
- Not reading the CMC contract — Understand cancellation terms, fee percentages, and what happens if your claim is rejected
- Missing the 14-day cooling-off period — If you've recently signed up and want to cancel, act within 14 days to avoid any fees
- Assuming a CMC speeds things up — Lenders have the same FCA deadlines regardless of who submits the complaint
- Forgetting you can claim for multiple agreements yourself — Each agreement is a separate simple complaint. A CMC charges their percentage on each one
Worked Example: DIY vs Claims Company
James from Birmingham had a PCP agreement on a 2017 Ford Focus. His lender found an unfair commission arrangement and calculated redress of £1,800. Here's what James receives under each route:
| Detail | DIY (Free) | CMC at 30%+VAT |
|---|---|---|
| Lender redress amount | £1,800 | £1,800 |
| CMC fee (30%) | £0 | £540 |
| VAT on CMC fee (20%) | £0 | £108 |
| Total CMC deduction | £0 | £648 |
| You receive | £1,800 | £1,152 |
James would lose £648 to the claims company — more than a third of his compensation — for something that took him 10 minutes to do himself using the FCA's free template letter.
This is a simplified illustration. Actual redress amounts depend on the specific commission arrangement, loan size, and duration. The FCA's estimated average payout is £829.
Final Thoughts
The overwhelming majority of people should claim DIY. It's free, it takes about 10 minutes, and the FCA has deliberately designed the Motor Finance Consumer Redress Scheme to be simple enough for anyone to use without professional help.
Claims companies provide a service that most people simply don't need for this scheme. They fill in the same form, submit it through the same channels, and the lender applies the same redress calculation regardless. The only difference is that a CMC takes 25–50% of your money for doing it.
If you haven't claimed yet, go to the FCA lender list, find your lender, and submit your complaint today. Keep your money in your pocket where it belongs.
This article is for general information only and does not constitute legal or financial advice. For specific guidance about your individual situation, consult Citizens Advice or a qualified solicitor. Claims management companies mentioned in this article are regulated by the FCA.
Related reading: Car Finance Claim Deadline June 2026 | Car Finance Claim Payout Calculator
Frequently Asked Questions
Find Your Next Car on SortedCars
Browse verified listings and buy with confidence.