The Financial Ombudsman is gearing up to charge claims management firms £250 to refer a case from 1 April. Profession claims management representatives accounted for 47% it looked at between April and December 2024.
Professional representatives will receive £175 back if the case outcome is in favour of the consumer. It will remain free for consumers to refer a complaint themselves, and for charities, families and friends who may be helping them.
The motor sector is braced for a surge in the number of motor finance claims being brought against finance houses.
Last year dealer law firm Motor Industry Legal Services (MILS) advised dealers to check that claims management companies raising complaints or subject access requests on motor finance are authorised to do so by their client.
Professional representatives will be able to bring ten cases to the service for free each financial year.
After that, every subsequent case they refer will be chargeable. They will receive £175 back in credit if the complaint is found in favour of the consumer they represent, reducing the charge they pay to £75.
Currently financial service firms pay a £650 case fee for complaints against them that the ombudsman investigates, while professional representatives do not pay a case fee.
Under the new rules, if a complaint referred by a professional representative is not upheld or is withdrawn, the financial business against whom the complaint was made will pay a reduced case fee of £475, instead of £650.
James Dipple-Johnstone, Interim Chief Ombudsman at the Financial Ombudsman Service, said: We’ve seen more cases brought by professional representatives, but fewer of these cases leading to a better outcome for their clients.
