The FCA has published proposals to introduce a price cap on the fees claims management companies (CMCs) charge their customers in relation to claims for financial products and services. Some consumers currently pay fees of more than 40% of the redress they receive. The proposed cap restricts this, and will mean CMCs won’t be able to charge more than 15-30% depending on how much redress a consumer is due. This will see some consumers saving several thousand pounds on the fees they pay to CMCs.
There is currently a PPI price cap for CMCs, which is 20% of the redress paid to the consumer. Apart from PPI, the vast majority of financial services and products claims currently being managed by CMCs relate to four particular financial services or products: packaged bank accounts, loans, savings and investments, and pensions.