FCA launches probe into claims firm over motor finance ads and sales tactics

The financial watchdog has launched an enforcement investigation into The Claims Protection Agency Limited (TCPA) over the firm’s advertising and sales tactics linked to motor finance compensation.

TCPA, whose trading names include My Claim Group, Martin’s Tips, Karen’s Claims, Express PCP and The PCP Guys sought to register potential claimants before referring them to law firms.

In October, regulator The Financial Conduct Authority (FCA) revealed its proposals for an industry-wide redress scheme to compensate up to 14 million car buyers who are eligible for mis-sold motor finance claims after widespread industry failures to adequately disclose the existence and nature of commission arrangements between motor finance houses and dealerships.

Under the proposed industry-wide redress scheme, car buyers would receive around £700 per agreement on average with lenders potentially paying out a total of £8.2 billion in compensation.

The FCA probe will examine what TCPA told customers about the amount of redress they might obtain, whether they were informed they could make a claim for free, and whether they were pressured to sign up.

The watchdog stressed it had not reached any conclusions on whether TCPA has breached regulatory requirements but noted that by going public it allows TCPA customers to consider their options.

TCPA has been required to stop onboarding new customers, stop publishing new financial promotions, and withdraw all existing financial promotions since August.

Concerned customers who have signed up with TCPA can complain directly to the firm. If they are unhappy with the response, they can escalate the complaint to the Claims Management Ombudsman.

The FCA said that while it does not normally publicise whether it is investigating a firm, the threshold of “exceptional circumstances” has been met because publication potentially protects consumers and prevents widespread malpractice.

Court challenge fails as FCA clamps down

The regulator initially notified TCPA of its intention to launch an enforcement investigation last September before the business applied to judicially review that decision.

The High Court dismissed that application in October, and the firm was refused permission to appeal by the Court of Appeal in December.

The TCPA investigation sits within a broader FCA push to tackle misleading claims advertising. Last July, the FCA issued a joint statement with the Solicitors Regulation Authority informing claims management companies about their concerns.

At that point, the FCA said its increased monitoring had led to the removal or amendment of more than 740 misleading adverts by FCA-regulated claims management companies since January 2024.

Last September, the FCA launched a £1 million awareness campaign advising that potential claimants do not need to use a claims management companies or law firm to seek compensation under the industry-wide redress scheme it is proposing.

FCA-commissioned research had found 79% of motor finance customers are aware they may be owed compensation and 61% are aware of a possible compensation scheme – but 41% of those who know they might be due money did not realise they would not need to use a CMC or law firm.

Last October, the FCA published its consultation paper on a proposed motor finance consumer redress scheme for customers who were treated unfairly. The consultation closed on 12 December and the FCA expects to publish final rules in either February or March.