Claims management companies (CMCs) have insisted they are there to help consumers claim compensation for mis-sold car finance agreements, amid continuing scrutiny of their fees. The car finance scandal, driven by historic practices within the motor finance industry, has prompted millions of UK drivers to prepare claims, with some reports warning consumers could lose up to 36% of their compensation by using a claims firm [1] instead of approaching lenders directly.

Consumer groups and the Financial Conduct Authority (FCA) have urged drivers to consider submitting claims themselves to avoid extra costs. But Andrew Franks, head of PCP claims company Reclaim247, says the criticism overlooks the benefits claims firms offer to people who may be unaware of their rights or unsure how to navigate the process.

“We won’t charge you more than if you had dealt with a solicitor directly. However, because we work with a panel of solicitors, we can recommend the one best suited to your claim, whether that depends on jurisdiction, claim value, or lender,” he said.

“We work very closely with Bott & Co solicitors. Whether you spoke to us directly or via our no-obligation claims checker tool that helps identify all of your historical agreements, both would have been no-win, no-fee, and the deductions would have been the same.”

Franks also pointed out that many consumers are unaware of their entitlement to car loan compensation, or unsure how to access the necessary paperwork and agreements to support their car finance claims. Firms like his, he argues, provide expertise and convenience that some customers are willing to pay for.

Consumer advocates, however, continue to advise drivers to proceed carefully and consider doing it themselves first. The FCA has published free resources to help people check their eligibility and file claims without professional help.

Franks acknowledges that going direct is an option, but believes many people benefit from guidance from finance claims experts. “We know this process can feel daunting, especially when people have multiple historical agreements to track down. We have set it up as easy and as stress-free for our clients as we possibly can,” he said.

Large-Scale Mis-Selling Ruling Raises Concerns Over Missing Records

Meanwhile, the Supreme Court recently ruled that millions of people were mis-sold car finance between 2007 and 2021 [2], and a formal redress process is expected to follow. While individuals can complain directly or wait for an official scheme, a recent UK-wide survey conducted by Find Out Now for consumer law firm Slater and Gordon [3] found that only 23% of people trust lenders to handle payouts fairly.

The same study drew attention to the danger of lost claims: 57% of those surveyed had moved at least once since getting their finance and more than 8 million people said they had lost some or all of their paperwork. Lenders have already admitted that some historic records are either incomplete or have been deleted.

📌 Key Insight:

A national survey has revealed that just 23% of people are confident that lenders will deal with distribution of compensation in a fair way following the mis-selling of car finance. While free, direct complaints are available, the figures indicate that a large proportion of the public remains uncertain about whether they will receive the full amount they are owed without independent oversight.

For many, uncertainty about their original lender or the absence of documents could complicate claims: an issue that may influence whether people choose to handle the process themselves or seek assistance.

The outcome of the recent Supreme Court decision [4], together with the FCA consultation due to take place in early October 2025 [5], will provide a route to establish a formal redress scheme. It is expected there will be significant activity on claims in the near future, with debate continuing over how much consumers should pay for help reclaiming what they are owed in the wake of the car finance scandal. Visit Reclaim247 for the latest updates about the car finance compensation scheme.

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1. consumers could lose up to 36% of their compensation by using a claims firm - https://www.theguardian.com/business/2025/jul/12/car-finance-fees-claiming-compensation-charges-fca-claims-firms
2. the Supreme Court recently ruled that millions of people were mis-sold car finance between 2007 and 2021 - https://www.theguardian.com/business/2025/aug/03/city-regulator-unveils-car-loan-compensation-scheme-worth-up-to-18bn
3. recent UK-wide survey conducted by Find Out Now for consumer law firm Slater and Gordon - https://www.slatergordon.co.uk/newsroom/consumers-trust-the-financial-conduct-authority-to-resolve-the-car-finance/
4. outcome of the recent Supreme Court decision  - https://supremecourt.uk/uploads/uksc_2024_0157_0158_0159_judgment_2bb00f4f49.pdf
5. FCA consultation due to take place in early October 2025 - https://www.fca.org.uk/news/press-releases/fca-consult-motor-finance-compensation-scheme