UK FCA challenges motor finance redress scheme, targets misleading law‑firm ads

The Financial Conduct Authority (FCA) has asked the Upper Tribunal to strike out a legal challenge to the motor‑finance redress scheme filed by Courmacs Legal and Consumer Voice, accusing the firms of concealing commercial motives and failing to give a full and frank explanation of their activities. The regulator warned that the challenge could delay a scheme that covers about 12.1 million motor‑finance agreements sold between April 2007 and November 2024, with an expected payout total of £7.5 billion.

In a parallel enforcement effort, the FCA identified 170 misleading advertisements by law firms and claims‑management companies promoting car‑finance claims. Using AI to monitor the ads, the regulator, together with the Advertising Standards Authority, highlighted issues such as unclear fee disclosures, exaggerated compensation claims, and false suggestions of affiliation with the FCA redress scheme. The ASA has opened investigations into the firms involved, and further enforcement action is expected.