A leading UK law firm has called for a temporary ban on car finance claims advertising, warning that growing numbers of motorists could face problems after signing up with multiple representatives.

The proposal comes amid concerns over duplicate complaints and the fees consumers may be charged when cancelling agreements they no longer want.

According to Legal Futures, which reported the story on 21 October 2026, the Financial Conduct Authority (FCA) estimates that more than one million motor finance complaints involve multiple representatives [1]. In some cases, consumers have reportedly signed up with as many as 20 different firms for the same claim.

The law firm believes a temporary pause on advertising would give the industry an opportunity to deal with existing complaints and prevent further cases of duplicate representation.

The suggestion comes at a time when regulators are already scrutinising how car finance compensation services are advertised and how consumers are treated after signing up.

For now, though, it remains a proposal. The FCA has not announced an industry wide ban on mis-sold car finance claims adverts.

Why is a ban on car finance claims advertising being proposed?

The concern is less about motorists making car finance claims and more about what happens when several companies are instructed to pursue the same complaint.

Someone who previously took out car finance might come across an advert offering to check their eligibility for compensation. They may then use another service without realising they have already authorised a company to act for them.

Whether this creates a second representation agreement depends on the terms accepted by the consumer.

Problems can arise when two or more firms believe they have permission to pursue the same claim. The motorist may then need to decide which representative to keep, particularly if the agreements contain cancellation charges.

The law firm calling for the ban believes the industry needs to resolve these issues before continuing to attract new customers through advertising.

It has urged regulators, consumer groups and businesses involved in motor finance claims to discuss how duplicate cases should be handled.

However, the proposal has not received formal regulatory approval. It is also unclear whether a temporary advertising ban would be adopted across the industry.

Why are duplicate car finance claims causing problems?

Having more than one representative for the same complaint can create confusion for everyone involved, especially the consumer.

For example, a motorist might complete a PCP claim check online and appoint a representative. Months later, they may come across another car finance refund check and agree to use that provider instead.

If the first instruction is still active, both companies could end up contacting the lender about the same agreement.

The situation becomes more difficult if the consumer wants to cancel one or both arrangements.

Some representation agreements allow firms to charge termination fees. When several agreements exist, a motorist could potentially face charges from more than one provider.

This is something the FCA and Solicitors Regulation Authority (SRA) have been concerned about for some time.

In a joint statement issued on 4 February 2026, the regulators told claims management companies and law firms to carry out proper checks before accepting new clients [2].

They also stressed that firms should explain their fees clearly and establish whether someone has already instructed another representative.

Where duplicate agreements already exist, firms are expected to work together to resolve the situation. Any termination fee should be reasonable and reflect the work actually carried out.

The regulators have also warned that inadequate checks could make it inappropriate to charge a cancellation fee at all.

What has the FCA done about misleading car finance adverts?

The latest proposal follows an existing crackdown on misleading advertising linked to the car finance scandal.

The FCA has been working with the SRA, Advertising Standards Authority (ASA) and Information Commissioner's Office (ICO) to examine how motor finance claims are being promoted.

Their work covers advertising, unwanted marketing, duplicate representation and fees charged to consumers.

In July 2026, the FCA reported that 170 misleading adverts had been removed or amended during June [3]. This brought the total to around 1,200 since January 2024.

Some advertisements failed to make their commercial purpose clear. Others referred to the FCA's redress scheme in ways that could leave consumers believing the advertiser had an official connection with the regulator.

There were also concerns about promotions that did not explain the option of making a complaint for free.

The crackdown has so far focused on misleading or noncompliant advertising rather than stopping all firms from promoting their services.

That is an important difference from the newly suggested ban, which would apply more broadly to car finance claims advertising while the issue of duplicate representation is addressed.

What has the FCA said about the proposal?

The FCA has defended its own advertising campaigns after questions were raised about the messages being given to consumers.

According to Legal Futures, the regulator explained that its advertising is intended to inform motorists about potential compensation and their ability to complain directly to lenders without paying a fee.

The FCA also continues to support its Motor Finance Consumer Redress Scheme, which is currently facing legal challenges.

Rather than announcing a new advertising ban, the regulator has been working with the SRA on an industry charter.

The proposed charter would bring lenders, claims management companies and law firms together under a common approach to cases involving multiple representatives.

The aim is to make it easier for consumers to choose which firm they want to handle their complaint without being unfairly disadvantaged by several termination fees.

Legal Futures reported that the FCA had initially shared the charter with two major claims management companies, five law firms and 17 lenders.

The regulator said most of those approached had responded positively, although support was not unanimous.

What does this mean for motorists making car finance claims?

The call for an advertising ban does not change how consumers can raise complaints about historic motor finance agreements.

Motorists who believe they may have been affected by car finance mis-selling can still contact their lender directly. This is free and does not require professional representation.

Those who would prefer assistance can choose an FCA regulated claims management company or a solicitor.

The important thing is to understand the agreement before signing up.

Someone who has already appointed a representative should check whether completing another PCP claim check or car finance refund check could result in a separate instruction.

It is also worth reviewing the fees, cancellation terms and services included in any agreement.

If a motorist discovers that several firms are handling the same complaint, they can contact those firms to establish which instructions remain active and how to proceed.

The FCA and SRA expect professional representatives to help resolve these situations fairly, with the consumer's choice taking priority.

Consumers who already have a car finance claim in progress do not need to appoint another firm because of the latest advertising proposal.

Will the proposed ban affect car finance compensation 2027?

There is no indication that the proposed advertising restrictions would change who qualifies for compensation under the FCA Motor Finance Redress Scheme.

The scheme is intended to address unfair commission arrangements in certain car finance agreements entered into between 6 April 2007 and 1 November 2024.

The FCA estimates that around 12.1 million agreements could qualify, with average compensation of approximately £829 per eligible agreement [4].

However, the scheme is facing separate legal challenges.

The Upper Tribunal has confirmed that the main hearing will take place from 16 to 26 February 2027 [5], with a judgment expected in the following months.

Payments under the suspended parts of the scheme remain on hold while those proceedings continue.

For consumers following the latest FCA car finance claims update or wondering when PCP claims will be settled, the February hearing remains the more important date for the compensation timetable.

The advertising proposal deals with how claims services are promoted and how duplicate instructions are managed. It does not determine whether a motorist is entitled to a car finance refund.

What happens next?

It remains to be seen whether the call for an advertising ban gains support from regulators or other businesses handling motor finance claims.

For now, the FCA and SRA are pursuing an industry charter to address duplicate representation. Their wider work on misleading advertising also continues.

The debate raises a practical question for the industry. How can firms make consumers aware of their compensation options while ensuring that people understand exactly what they are signing up for?

For motorists, the proposed ban does not change their ability to look into historic car finance agreements or make a complaint.

Those considering a car finance claim can still review their options, check any existing representation agreements and decide whether they want to pursue the matter themselves or seek professional assistance.

_________

References:

1. According to Legal Futures, which reported the story on 21 October 2026, the Financial Conduct Authority (FCA) estimates that more than one million motor finance complaints involve multiple representatives - https://www.legalfutures.co.uk/latest-news/exclusive-leading-law-firm-calls-for-ban-on-car-finance-claim-adverts
2. In a joint statement issued on 4 February 2026, the regulators told claims management companies and law firms to carry out proper checks before accepting new clients - https://www.fca.org.uk/news/statements/fca-sra-professional-representatives-motor-finance-commission-claims
3. In July 2026, the FCA reported that 170 misleading adverts had been removed or amended during June - https://www.fca.org.uk/news/press-releases/joint-taskforce-continues-crack-down-misleading-car-finance-claims-adverts
4. The FCA estimates that around 12.1 million agreements could qualify, with average compensation of approximately £829 per eligible agreement - https://www.fca.org.uk/publication/policy/ps26-3.pdf
5. The Upper Tribunal has confirmed that the main hearing will take place from 16 to 26 February 2027 - https://www.fca.org.uk/news/statements/motor-finance-legal-challenge-be-heard-february-2027