By Steve Conley, Founder – Academy of Life Planning
The Financial Conduct Authority (FCA) has announced a new multi-agency crackdown on “misleading” advertising by claims management companies (CMCs) and certain law firms handling motor-finance cases. The initiative, coordinated with the Solicitors Regulation Authority (SRA), Information Commissioner’s Office (ICO) and the Advertising Standards Authority (ASA), is presented as a consumer-protection effort.
Yet beneath the rhetoric lies a troubling reality: the campaign risks silencing one of the few remaining mechanisms that gives ordinary consumers legal recourse against powerful financial institutions.
The imbalance of power
When a bank, insurer, or lender acts unfairly, the individual consumer is almost always at a disadvantage. They face information asymmetry, technical complexity, and regulatory inertia. Those who have suffered loss — often the elderly, vulnerable, or digitally excluded — cannot easily challenge multinational firms backed by teams of lawyers and compliance departments.
That is precisely where CMCs and specialist law firms step in. They operate as intermediaries between consumers and institutions, helping individuals understand their rights, gather evidence, and navigate opaque complaint processes. Without such representation, countless victims of mis-selling, overcharging, and financial abuse would never even attempt to seek redress.
The capture problem
Regulators, however, appear to be moving in the opposite direction. Since the FCA took over regulation of CMCs in 2019, the number of firms in the sector has fallen sharply. Many smaller operators — those most accessible to consumers — have been driven out through rising compliance costs and new restrictions.
This might look like progress from a City boardroom. Fewer CMCs mean fewer claims, fewer headlines, and fewer payouts. But it also means less accountability for systemic misconduct.
The irony is profound: regulators accuse CMCs of “misleading” advertising while simultaneously running their own £1 million taxpayer-funded campaign telling consumers they don’t need representation. That narrative perfectly aligns with the financial industry’s growth agenda — keeping complaints in-house, minimising compensation exposure, and maintaining the illusion of a well-functioning market.
Evidence of systemic collusion
There is growing concern — supported by the experiences of campaigners, victims, and whistle-blowers — that regulators, ombudsmen, and sections of the judiciary have become structurally aligned with the interests of the institutions they are supposed to police.
- The FCA routinely closes misconduct cases with “no further action,” even where evidence of consumer harm is overwhelming.
- The Financial Ombudsman Service often interprets its remit narrowly, leaving thousands without redress.
- The SRA focuses its scrutiny on claimant law firms, rarely on defence firms representing banks or servicers.
- And the courts increasingly defer to regulatory discretion — effectively placing financial law beyond public accountability.
In such an environment, to attack CMCs is not to protect the consumer. It is to disarm them.
The case for reform — not eradication
Yes, there are poor-quality CMCs that exploit vulnerable clients. These must be weeded out. But the answer is proportionate regulation, not collective punishment. Genuine consumer advocates need support, training, and transparent standards — not suppression.
In complex or high-value cases, especially where there is evidence of systemic wrongdoing, professional legal representation is not a luxury; it is a safeguard of justice.
A call for balance
If regulators are truly committed to “informed choice,” they should welcome — not fear — independent claimant representation. They should publish data on how many complaints succeed without CMC or legal help, disclose how many enforcement actions they have taken against major financial firms, and explain how their “growth” agenda aligns with consumer protection.
Until then, the CMC remains an imperfect but necessary ally for the ordinary citizen — a counterweight to a system increasingly tilted toward those with the deepest pockets.
About the Author:
Steve Conley is Founder, Academy of Life Planning | Building the Global Movement for Holistic Wealth Planning | Financial Justice & Transparency Advocate. He campaigns for fairness, transparency, and empowerment in financial services.
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