The Finance & Leasing Association (FLA) is urging early action to protect consumers and support growth. It suggests body says action on well-evidenced harms should not wait until 2027, warning poor claims practices are increasing costs and delaying redress.
The trade body has welcomed the Financial Conduct Authority’s (FCA) market study into claims management services as it represents an important opportunity to improve outcomes for consumers and strengthen confidence in the claims management market.
Shanika Amarasekara MBE, Chief Executive of the Finance & Leasing Association, said: “We welcome the FCA’s decision to undertake this important market study. It reflects the importance of ensuring that the claims management market works effectively for consumers and firms alike.
“The review also presents an opportunity to take action where there is already clear evidence of consumer and market harm, rather than waiting until the study concludes in 2027.
“Consumers should not face unnecessary delays, confusion or costs because of poor practices in the claims management market. Nor should businesses be forced to devote ever-increasing resources to tackling low-quality, duplicative or speculative claims.”
The FLA urged the FCA to work closely with the Solicitors Regulation Authority (SRA), particularly in light of ongoing motor finance commission claims and the potential scale of future redress.
Poor practices by some claims management companies, claimant law firms and lead generators could create confusion for consumers which in turn drives up costs and delays redress.
Beyond individual firms, members provide the finance that supports households and businesses across the UK, funding everything from cars and commercial vehicles to business equipment, plant and machinery.
Amarasekara said: “Addressing these issues is not simply about improving consumer outcomes. It is also about ensuring that firms can focus their resources on supporting customers, financing investment and contributing to economic growth.
“Every resource unnecessarily diverted into poor-quality claims handling is a resource that cannot be used to support customers, finance investment or help businesses grow.
“We look forward to working constructively with the FCA, the Solicitors Regulation Authority and other stakeholders throughout the review to help identify practical solutions that improve consumer outcomes, strengthen market efficiency and support the wider economy.”
