The Financial Conduct Authority (FCA) has been involved in a controversy following its admission that it is to spend £1 million on a marketing drive to deter drivers from seeking compensation for car loans [1]. The regulator argues that the campaign is intended to reduce the influence of so-called “claims firms,” but critics say it risks undermining consumers’ right to redress following the car finance scandal that has already rocked the motor industry.

The conflict between industry associations and consumer organisations revolves around whether the adverts suggested by the FCA have the potential to discourage individuals in submitting valid claims, even following a Supreme Court decision that has recently taken place indicating that massive mis-selling in the car financing sector has taken place. The move comes at a critical time, with the FCA also preparing an open consultation thisOctober on how to deliver redress for millions of affected motorists [2].

FCA’s controversial advertising push

The FCA says that its £1 million drive will prevent drivers from getting unhelpful advice from unregulated firms which do not have to sign up to codes of conduct. It says this is of particular importance as large numbers of car finance complaints are expected over the next year. Officials say that some claims companies may persuade people to make claims that are ultimately unsuccessful. Those firms would either end up out of pocket on fees or be let down by delays.

Yet critics see the campaign as a deeply problematic attempt to suppress valid claims. Consumer advocates point out that only 23% of drivers trust lenders to handle payouts fairly [3], and with many finance companies already claiming records are missing or deleted, borrowers are right to feel anxious. More than 57% of potential claimants have moved house since their finance deals were taken out, and over 8 million have lost paperwork, raising questions about how easy it will be for individuals to make claims directly.

This advertising battle is unfolding in the shadow of a landmark court case. On 1 August 2025 the Supreme Court stated car finance agreements entered into between 2007 and 2021 had in many cases created an “unfair relationship” between the lender and the consumer contrary to the Consumer Credit Act [4].

For the FCA, the ruling increases pressure to deliver a compensation scheme that is both transparent and efficient. In its latest communications, the FCA expects to pay compensation to millions of mis-sold car finance customers next year, with the average redress estimated at £950 per eligible agreement [5].

However, as with PPI, there are growing concerns about how long the process could take. Consumers are asking: what happens if a company ignores the ombudsman after being ordered to provide redress? Previous financial disputes have shown that lenders can delay or resist payouts, leaving claimants waiting months or even years for resolution.

This uncertainty means many consumers are turning to a finance claims expert or regulated claims management company for help navigating the complex process. For those struggling to identify their lender or gather paperwork, specialist support could make the difference between securing compensation or being left behind.

But critics argue that the regulator faces a serious credibility challenge. With many lenders still denying responsibility and suggesting that records may no longer exist, trust in the industry remains extremely low. Consumer advocates have already raised concerns that if lenders are given too much control over the process, millions of drivers could once again lose out.

Meanwhile, websites offering the latest updates on car finance claims in the UK are reporting high levels of public interest. Borrowers are keen to know whether they should file claims now or wait for the FCA’s redress scheme, especially as money experts remain divided. Some advisers say motorists should hold off, but others argue that delays could cost people their chance at justice.

This debate has also fuelled demand for independent support. Many consumers are exploring whether working with a claims management company could simplify the process. For those asking, how long does Reclaim247 take, the company says initial claims assessments can be completed in as little as 60 seconds, with the reassurance that no paperwork or car registration is required.

Should you consider using a claims management company?

Millions of drivers now face a choice over how to claim compensation from their lender as the car finance scandal continues to unravel and the FCA starts to plot its next moves. Both methods of making a claim (via the official redress scheme or via alternative methods) have their risks, but it’s a fact that many consumers simply do not trust the same lenders accused of mis-selling car finance to handle their payouts fairly.

This is where regulated firms like Reclaim247 come in. Drivers who are unable to locate paperwork, don’t recall who their lender was or have changed their address since the agreement can find a service particularly useful. Reclaim247 is a regulated operation: it’s FCA-authorised, and the solicitors work on a no win, no fee basis for all claims. For many drivers, this can be a quicker and more certain way of getting a car finance refund than waiting for an industry-led solution that may not materialise.

Conclusion

The FCA’s £1 million ad campaign has sparked a heated row, reflecting broader tensions in the wake of the car finance mis-selling claims scandal. With the Supreme Court recently ruling that millions of agreements were mis-sold and the FCA’s redress scheme still just in consultation, drivers are left with a dilemma on what to do.

Whether you are thinking of waiting to see how the FCA's scheme pans out or are looking for independent support from a claims management company, one thing is for sure: this is a once in a generation opportunity for motorists to reclaim money they should never have lost in the first place.

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References:

1. FCA to spend £1 million on a marketing drive to deter drivers from seeking compensation for car loans - https://www.birminghammail.co.uk/motoring/motoring-news/fca-war-over-1m-ad-32569587
2. FCA also preparing an open consultation in October on how to deliver redress for millions of affected motorists - https://www.fca.org.uk/news/press-releases/fca-consult-motor-finance-compensation-scheme
3. only 23% of drivers trust lenders to handle payouts fairly - https://www.slatergordon.co.uk/newsroom/consumers-trust-the-financial-conduct-authority-to-resolve-the-car-finance/
4. On 1 August 2025 the Supreme Court stated car finance agreements entered into between 2007 and 2021 had in many cases created an “unfair relationship” between the lender and the consumer contrary to the Consumer Credit Act. - https://supremecourt.uk/uploads/uksc_2024_0157_0158_0159_judgment_2bb00f4f49.pdf
5. average redress estimated at £950 per eligible agreement - https://www.birminghammail.co.uk/motoring/motoring-news/14-million-drivers-could-receive-32193839