The UK’s top regulators have joined forces to launch a new taskforce to prevent motor finance claims from turning into a repeat of the “feeding frenzy” triggered by the PPI compensation scandal, which at its height saw nearly 70% of British adults being targeted by unwanted calls, texts, emails and direct mail.
The move has seen the Financial Conduct Authority, the Information Commissioner’s Office, the Advertising Standards Authority and the Solicitors Regulation Authority agree to join up their efforts to police claims management companies, law firms, and rogue businesses.
Earlier this week, the FCA pressed the button on its long-awaited industry-wide scheme to compensate millions of people who were treated unfairly when they took out motor finance to buy a new or secondhand vehicle.
The watchdog said the scheme “will put £7.5bn back into people’s pockets” and result in a likely total bill for lenders of £9.1bn. It said millions of claims would be paid up later this year and the vast majority settled by the end of 2027.
And while the payouts dwarf the PPI compensation, which totalled over £36bn, the regulators have agreed to step up efforts to share intelligence and take co-ordinated and targeted actions using the full extent of their powers to mitigate harm to consumers.
They insist they will take swift action to tackle issues with unsolicited and misleading advertising, meritless claims, multiple representation, and unfair exit fees.
ICO head of investigations Andy Curry said: “The law is long-standing, clear and simple – do not send unsolicited direct marketing without consent. We provide advice and support to help companies to comply, but where we see unlawful practices causing harm to the public, we will take action to the fullest extent. This is a serious issue, and we will work alongside our taskforce partners, pooling our expertise, knowledge and powers to address it.”
The ICO has fined dozens of companies over the years for illegal marketing related to PPI claims, particularly during the peak of the scandal between 2015 and 2018. Several companies were fined for massive campaigns, such as Your Money Rights (£350,000 for 146 million calls) and Miss-sold Products UK (£350,000 for 75 million calls).
By 2020, the claims management sector had received over £3.2m in fines, largely for nuisance calls related to PPI. However, many companies, such as Keurboom Communications, folded or entered voluntary liquidation to avoid paying the fines.
ASA director of complaints and investigations Miles Lockwood added: “It’s vital that ads promoting motor finance redress services are clear about the commitments and costs of engaging with a CMC or law firm. The ASA will take robust and proactive action to tackle misleading advertising of such services, working in partnership with other regulators as part of this taskforce.”
The FCA, meanwhile, has been quick to point out that consumers can apply through its free scheme. Director of consumer finance and taskforce lead Alison Walters said: “People don’t need to use a CMC or law firm. Should they decide to do so, it’s important that they can trust CMCs and law firms to act in their best interests. This taskforce will ensure we deal with problems quickly and decisively.”
Related stories
Watchdog bites as war on illegal finance ads escalates
PPI firm grovels over ‘Dear Mr Dick Head’ mailshot
Revealed: 5 billion reasons why claims firm love DM
PPI firm banned for totting up 40m nuisance calls
Your number’s up, ICO warns rogue marketing firms
Reckless call centre fined £200,000
Claims firm battered by £850,000 cold call fine
Be the first to comment on "Regulators unite to pre-empt car finance ‘feeding frenzy’"