On 29 November 2021, the Financial Conduct Authority (FCA) published Policy Statement 21/18 ‘Restricting CMC charges for financial products and services claims’ (PS21/18).
In PS21/18 the FCA responds to the comments received to Consultation Paper 21/1 ‘Restricting CMC charges for financial services and products claims’ (CP21/1) and sets out final rules.
In PS21/18 the FCA is restricting claims management companies (CMC) fees through a fee cap.
Specifically, the new rules will:
- Cap the fees that CMCs may charge on claims for non-payment protection insurance (non-PPI) financial products and services where the consumer has been awarded redress and the claim falls within scope of the financial services redress system (meaning the complaints resolution rules in the Dispute Resolution sourcebook and/or a statutory ombudsman or statutory compensation scheme, including (but not limited to) the Financial Ombudsman Service (the ombudsman service), the Financial Services Compensation Scheme or the Pensions Ombudsman).
- Require fees to be reasonable in cases where fees charged on non-PPI financial products and services claims are outside the scope of the cap.
- Improve the way CMCs managing claims about all financial products and services disclose key information to consumers at the pre-contract stage, to help consumers make better-informed decisions about using CMC services.
- Update and clarify existing rules by making minor amendments to the Claims Management Conduct of Business sourcebook, the Consumer Redress Schemes sourcebook and the Perimeter Guidance Manual.
The new rules will come into force on 1 March 2022.