The FCA has launched a consultation on its proposals for introducing a price cap on the fees CMCs can charge customers for handling financial products and services claims.
Among the key proposals set out in the consultation paper are:
- Addressing harm to consumers by restricting the fees CMCs can charge them for claims management activity relating to non-PPI financial products or services
- Enhancing requirements for all CMCs to disclose information that will help consumers make an informed choice about whether to use their services where there is an option to claim under a statutory scheme
- Making minor changes to clarify and improve certain aspects of the current rules for CMCs.
With some consumers reportedly paying as much as 40% of their redress in fees, the proposed cap aims to protect consumers with a fees limit of between 15-30%, depending on the scale of redress. The FCA believes this could save some consumers thousands of pounds.
PPI claims are not included in the proposed cap, as they are already subject to a separate 20% cap set by Parliament.
New pre-contract information disclosure requirements on CMCs include giving consumers more information on how fees are calculated and signposting free alternative routes to redress.
To find out more, contact a member of our expert team on 01925 765777, or email us at firstname.lastname@example.org.