Questions to Ask Before Using a Claims Management Company

Many people use claims management companies (CMCs) without fully understanding the fees involved or that the same complaint can be made for free. If you are considering using a CMC, these questions can help you make an informed decision.

1. Is the company FCA authorised?

Claims management companies in the UK must be authorised by the Financial Conduct Authority. Check the FCA Register at register.fca.org.uk before engaging with any CMC. A firm that is not FCA-authorised should not be offering claims management services.

2. Have they told you that you can complain for free?

FCA-authorised CMCs are legally required to tell you, in writing, that you can make the complaint yourself for free before you agree to use their services. If they have not done this, that is a breach of their FCA obligations.

3. What is the exact fee?

Ask for the fee in pounds and pence on a hypothetical compensation amount. For example, if compensation is £2,000, what exactly would you pay? Include VAT in the calculation. Common fees range from 25% to 40% plus VAT.

4. Are there any upfront or administration fees?

Some CMCs charge fees that apply regardless of the outcome. Understand this before signing anything. A contingency-only fee structure means you pay nothing unless compensation is received, but always confirm this in writing.

5. What are the cancellation terms?

Can you cancel the agreement? If so, under what circumstances and at what cost? Understanding cancellation rights before you sign means you will not be surprised later.

6. Who will actually handle your complaint?

Ask who will be dealing with your case — a qualified person familiar with your specific type of complaint, or a general call handler processing many cases at once. The answer matters for the quality of service you receive.

7. What happens if your complaint is not upheld?

If the FOS does not uphold your complaint, do you owe the CMC anything? Confirm this clearly. Most contingency-fee arrangements mean no compensation means no fee — but always verify this.

The free alternative

Remember: you can make the same complaint yourself for free. The FOS is free, independent and accessible to consumers directly. Citizens Advice and MoneyHelper provide free guidance. These options are available before you sign anything.