Claims management companies: what they do and what they charge

A claims management company (CMC) is a business that, for a fee, helps you make certain types of claims against financial services providers, such as claiming for mis-sold payment protection insurance (PPI)¹. You hand over the paperwork, the company pursues the claim, and if compensation is paid, it takes a share. In the FCA's motor finance compensation scheme, the regulator has warned consumers using a claims management company or law firm that they could lose over 30% of any money they get².

The central fact for anyone considering one: you do not need a claims company. The Financial Ombudsman Service, which settles disputes between consumers and financial firms, states plainly that you do not need to pay anyone to represent you³. Complaining yourself is free, and the compensation routes, the ombudsman and the Financial Services Compensation Scheme (FSCS), are open to you directly. The FSCS notes that whether you take your claim to a claims management company or go straight to it, you have to provide the same information⁴.

Claims companies are regulated by the Financial Conduct Authority (FCA) in Great Britain, their fees are capped, and you have cancellation rights. This page explains what these companies do, what they charge, how to cancel, how to check one is genuine, and how to complain about one for free.

What a claims management company does

A claims management company offers to handle a compensation claim on your behalf: it gathers your documents, contacts the firm you are complaining about, and submits the claim to that firm, to the Financial Ombudsman Service, or to the FSCS where a regulated firm has failed. The government's guidance describes their work as helping you make certain types of claims against financial services providers for a fee, with mis-sold PPI the classic example¹.

Their role in the complaints system has been substantial at times. In the year ended 31 March 2009, the number of ombudsman cases where the consumer was represented by a claims-management company increased by 40%⁸. By 2011/2012, claims-management companies brought 69% of the 157,716 new PPI cases that year⁹, and they accounted for 46.5% of all complaints referred to the ombudsman service on behalf of consumers⁹. The market is also concentrated: ten claims-management companies accounted for 40% of the cases the ombudsman handled in 2013/2014 where consumers were represented¹⁰.

What a company actually does for its fee is largely administrative. It fills in forms you could fill in yourself, chases the firm, and forwards the outcome to you. It does not have special access to compensation, and it cannot get you a bigger award than you would get by complaining directly. The ombudsman applies the same rules and reaches the same answer whoever submits the paperwork. In 2015/2016, over three quarters of PPI complaints received by the ombudsman had been referred on behalf of consumers by commercial claims management companies¹¹, yet the ombudsman's decisions on those complaints were made on exactly the same basis as complaints brought by consumers themselves.

You do not need a claims company to make a complaint

The Financial Ombudsman Service is explicit on this point:

The same guidance adds that you can ask a family member, friend or someone else to help you with a complaint if you want support, without paying a representative¹². The ombudsman's process is designed for consumers to use directly, and it publishes contact details for regulated financial businesses so you can find the right firm to complain to³.

The FSCS, which pays compensation when regulated financial firms fail, makes the same point from the other direction. Whether you take your claim to a claims management company or come straight to the FSCS, you have to provide the same information⁴. A claims company cannot unlock anything that is closed to you, and it will take a cut of your compensation⁴. The FSCS also notes that by using a personal representative rather than a professional representative such as a solicitor or claims management company, there is no fee and the claimant gets all the compensation due¹³.

If you find the forms daunting, free help exists. The ombudsman's own guidance on making a complaint walks through the process, and its pages on how to complain to the Financial Ombudsman Service explain what happens after you submit. MoneyHelper, the government-backed money guidance service, also publishes free information on scams and claims, including how to check whether an approach is genuine¹⁴.

Fees: up to 30% of any compensation

The core trade-off with a claims company is simple: it does the paperwork, and it takes some of any compensation you might get¹⁵. The size of that share is the number to look at before signing anything.

In the FCA's motor finance compensation scheme, announced as the regulator confirmed payouts for millions of car finance customers, the FCA warned that consumers who use a claims management company or law firm could lose over 30% of any money they get². That is not a marginal deduction. On a compensation payment, a fee at that level is taken off the top before you see the money.

The ombudsman's own data gives a sense of how claims company complaints fare. In 2021/2022 it received 703 complaints about claims management companies, with an overall uphold rate of 30%¹⁶. That figure concerns complaints about claims companies themselves, but it illustrates that these firms are not infallible: consumers take them to the ombudsman in meaningful numbers, and a substantial share of those complaints is upheld.

Fees are usually charged as a percentage of compensation, which means the company's incentive is aligned with winning, but also that the more you win, the more it takes. Some agreements also charge fees for work done even if the claim fails or you cancel, which is where exit fees and the cooling-off period, covered below, matter. Before signing, the practical questions are: what percentage, of what amount, and when does it become payable.

How fees are capped and what you must be told before you sign

The FCA regulates claims management companies and sets rules on how they can charge. The government's guidance frames the consumer-side position clearly: a claims management company will take a cut of your compensation⁴, and the FCA's warning in the motor finance scheme puts the potential loss at over 30% of any money you get².

What a claims company must tell a customer before a contract is signed follows from the regulatory framework. The FCA's conduct rules for claims companies require them to be clear about fees and how they are calculated, and poor conduct, such as breaking the conduct rules for claims companies, unsolicited calls or texts, or not being registered on the financial services register, is something that can be reported to the FCA¹. Claims management companies are required to explain how they calculate their fees in their pre-contract information and to provide a breakdown of their fee⁴. The FSCS reinforces the point that the information required is identical whether a claim is made through a company or directly⁴, so the only thing the company adds is its fee.

A fee worked out as a percentage of compensation behaves differently from a flat fee. A percentage fee grows with the award, so a large payout means a large deduction in cash terms. Check whether the percentage applies to the total compensation, including any interest, or only part of it, and whether any fee is charged for work done if the claim fails. The FCA's motor finance warning, "you could lose over 30% of any money you get"², is the benchmark to measure any quoted fee against.

Cancelling an agreement: the cooling-off period and exit fees

The law gives you a right to cancel. Under the Digital Markets, Competition and Consumers Act 2024, a consumer has the right to cancel a subscription contract during the initial cooling-off period, and any renewal cooling-off period, in any circumstances and without conditions other than those set out in the relevant chapter⁷. The Act sets out this right to cancel during cooling-off periods in its subscription contract provisions¹⁷.

The practical effect is staged. During the cooling-off period you can cancel, though the cost of any work you already asked for may be kept. After the cooling-off period, if you cancel before any redress has been agreed, a fee may be charged for work done, and the FCA's fee cap does not apply at that stage. Once redress has been agreed, the fee is usually taken from the compensation. The general rules on cooling-off periods and cancelling financial products explain how these rights work across financial services.

If you are cancelling because of pressure or misleading claims when you signed, separate rights may apply: misleading and aggressive selling can give you the right to unwind a contract, and unfair contract terms covers when a term cannot be enforced.

Who regulates claims companies, and where FCA rules do not apply

Claims management companies providing services from, or to consumers in, England, Scotland or Wales are regulated by the FCA, and complaints about them can be taken to the Financial Ombudsman Service⁶. The FCA regulates financial services in the UK, and you can check a firm's status using the online FCA register or by telephoning the FCA consumer helpline²¹.

Northern Ireland is different. The Claims Management Ombudsman states:

So if you are in Northern Ireland, or the company is based there, tell the ombudsman when you complain and it will advise how your case is handled. The ombudsman's jurisdiction over claims company complaints covers firms serving England, Scotland and Wales⁶.

Two limits on protection are worth knowing. First, the FCA cannot pay compensation or order a claims management company to compensate you, even where service has been poor¹; its role is conduct regulation, not redress. Second, the FSCS only considers claims against failed regulated firms, and where a business offering a service is not regulated by the FCA, FSCS protection does not extend to it²². The ombudsman's remit has also been confirmed in policy as covering complaints made by customers of claims management companies, alongside consumers and small and medium-sized enterprises²³. For the wider picture of who guards what, see consumer protection in UK financial services.

Checking a claims company is registered and spotting scams

Before dealing with any claims company, check it is registered. The FCA maintains the financial services register, and you can use the online register or telephone the FCA consumer helpline to check a firm²¹. Not being registered on the financial services register is itself an example of poor conduct you can report to the FCA¹.

Scammers imitate real firms, so verify contact details independently. The ombudsman's guidance is to check that the contact details match those listed on the FCA's firm checker, to avoid scammers pretending to be a real firm²⁴. MoneyHelper's advice on advance-fee fraud goes further:

Unsolicited contact is a warning sign in itself: unsolicited calls or texts from a claims company are examples of poor conduct the FCA acts on¹. The UK's payment firms have also seen additional interventions from the Payment Systems Regulator to improve data sharing to spot and prevent scams, including the roll-out of the name-checking service, Confirmation of Payee²⁶, which is designed to help prevent authorised push payment scams and misdirected payments²⁷. Confirmation of Payee checks that the name on a payment matches the account, which helps when paying any firm for the first time. More on scams and fraud explains these protections in full.

Claims that rarely succeed: unenforceable credit agreements

One type of claim deserves particular caution: claims that a loan or credit card agreement is "unenforceable" because of a technical defect in the paperwork, often sold with the promise that the debt will be written off. These claims rarely succeed, and the government's guidance lists poor conduct by claims companies that includes breaking the conduct rules, unsolicited contact and failing to be registered¹.

The enforcement reality is that courts can enforce credit agreements. Where an agreement is regulated by the Consumer Credit Act, the county court process for enforcement, including applying for a warrant of control, has no upper limit set by the claims process itself²⁸. In other words, a claim company's assertion that an agreement is unenforceable does not stop a lender from pursuing enforcement through the courts, and paying a fee for such a claim can leave you with neither the write-off nor your money back.

If you are struggling with debt rather than disputing an agreement, free debt advice is the better route, and the debt guide sets out the options. If you have already paid a claims company for an unenforceable credit agreement claim and believe the advice was inappropriate, that is one of the complaint types the Claims Management Ombudsman can look at, alongside unjustified or unclear fees, delays in progressing claims, poor communication and failure to follow instructions⁵.

Complaining about a claims company

If a claims company has charged you an unclear fee, delayed your claim, given incorrect advice, communicated poorly or failed to follow your instructions, you can complain, and the ombudsman can look at all of those types of complaint⁵. The process starts with the company itself.

1. Ask the claims company for a copy of its complaints procedure, or check its website¹.
2. Contact the claims company with your complaint, so it has a chance to put things right¹.
3. Keep a record of your complaint: dates, what you sent, and what came back¹.

The company has to give its final response to your complaint within eight weeks⁵. If it does not respond in time, or you are unhappy with its response, you can take the complaint further. Separately, if your complaint is about the company's conduct rather than a dispute over money, you can complain to the FCA, which acts on poor conduct such as breaking the conduct rules, unsolicited calls or texts, and firms not on the register¹. The FCA cannot get you compensation¹, so a conduct report and a redress complaint are two different things, and you can do both.

The general process for complaining to a financial firm applies here too: put it in writing, state what you want done, and keep copies.

Taking a complaint to the Claims Management Ombudsman

The Financial Ombudsman Service can help people with complaints about claims management companies⁶, and the dedicated Claims Management Ombudsman service handles them. Bringing a complaint is straightforward and costs nothing²⁹. The ombudsman's own process is that the claims company is given a chance to sort things out first, and the complaint is then brought to the ombudsman if the customer is still unhappy²⁹.

You will need some basic information: your name and address, what the problem is and how you want things put right, and any relevant reference details²⁹. You usually need to contact the ombudsman within six months of the claims company's final response⁵. The volume is modest but real: the ombudsman received 52 new complaints against claims management companies in the first quarter of 2026/27, April to June 2026³¹.

What the ombudsman can order is broad. It can tell the company to do one or several of the following: apologise, pay an award for financial loss, refund fees and charges that should not have been paid, and pay compensation for any distress and inconvenience caused⁵. The purpose of compensation is to put the customer back in the position they would have been in if the claims management company had not got it wrong³². There is a limit to how much the ombudsman can tell a company to pay³², and the guide to how much compensation the Financial Ombudsman can award explains how award limits work. If a customer disagrees with the outcome, what to do if you disagree with an ombudsman decision sets out the position.

The ombudsman's service is also being modernised: new powers to dismiss complaints better resolved elsewhere, or with no financial loss, material distress or inconvenience, came into effect on 1 October 2026, and pilots of a new registration approach begin with fraud and scams casework in October 2026²³. For claims in flight, the motor finance example is instructive: complaints brought to the ombudsman before 30 March 2026 are not affected by the FCA's motor finance redress scheme and will be investigated and answered in due course³³. The ombudsman processed 21,500 new motor finance commission complaints across all financial products in the first quarter of 2025/26, down from 36,000 in the last three months of 2024/25³⁴.