FLA urges FCA to act sooner on claims management harms

The Finance & Leasing Association (FLA) has welcomed the Financial Conduct Authority’s decision to launch a market study into claims management services, while calling for earlier intervention where evidence of consumer harm is already well established.

The trade body said the review provides an opportunity to improve consumer outcomes and strengthen confidence in the claims management sector. However, it warned that poor practices by some claims management companies, claimant law firms and lead generators are already creating problems for consumers and businesses alike.

According to the FLA, poor-quality, duplicate and speculative claims are causing confusion for consumers, delaying redress and increasing costs for firms attempting to resolve complaints fairly and efficiently. The association also urged the FCA to work closely with the Solicitors Regulation Authority throughout the review, particularly given the ongoing volume of motor finance commission claims and the potential scale of future redress activity.

The FLA said the impact extends beyond complaints handling. Its members provide finance for consumers and businesses across a range of sectors, including cars, commercial vehicles, plant and machinery. The association argued that resources diverted towards handling poor-quality claims reduce productivity and limit the industry’s ability to support investment, consumer spending and wider economic growth.