Consumer-finance scams and pushy claims-management firms (CMCs) are a persistent concern for UK borrowers. The Financial Conduct Authority (FCA) publishes warning signs and tools that can help people spot a firm that may not be operating legitimately. This piece sets out what to look for and what to do if something feels wrong.
What borrowers need to know
The FCA regulates firms that offer financial products and services in the UK, including claims-management companies. Any firm carrying out regulated financial activity in the UK is required to be authorised or registered by the FCA.
Key warning signs the FCA highlights include:
- Unsolicited contact. Calls, texts or emails out of the blue about a loan, claim or investment are a common entry point for scams.
- Pressure tactics. Pressure to act quickly, or claims that an offer expires imminently, are a recognised warning sign.
- Upfront fees. A claims-management company asking for payment before it has done any work is a practice the FCA has flagged. CMCs regulated by the FCA are subject to rules about how they charge.
- Promises of outcomes. No legitimate firm can promise that a claim will succeed, that a loan will be approved, or that a specific financial outcome will follow. If a firm makes such promises, that is a reason to be cautious.
- Unverifiable contact details. A firm that cannot provide a clear address, registration number, or a phone number that matches its FCA listing warrants extra scrutiny.
Why it matters
Scams and illegitimate CMCs can cause direct financial harm. People have lost money to upfront fees that were never returned, and to identity fraud enabled by sharing personal details with unregistered firms. For borrowers already in financial difficulty, these contacts can also lead to worse outcomes: a scam firm may not resolve a complaint at all, leaving the original problem unaddressed.
Who may be affected
Anyone who has recently applied for credit, missed a payment, or has an outstanding loan may be targeted. CMC approaches are also common for people who have previously held payment protection insurance (PPI) or other regulated financial products. Borrowers who have been refused credit are sometimes targeted with offers of "no-credit-check" or fee-charging intermediary services.
How to check a firm
The FCA's Financial Services Register (available via the FCA website) lists all authorised and registered firms in the UK. Checking a firm's registration number against the register before sharing personal or financial information is a useful first step. The FCA also maintains a Warning List of firms operating without authorisation.
If a caller claims to represent a regulated firm, it can help to end the call and phone the firm back using a number from the FCA register directly, rather than a number provided by the caller.
How to report a concern
Concerns about a firm's behaviour can be reported to the FCA via its consumer helpline. The FCA's number is 0800 111 6768. Action Fraud (the national fraud and cybercrime reporting centre) also accepts reports and can be reached at 0300 123 2040.
If a claim has already been submitted to a CMC and there are concerns, the Financial Ombudsman Service can consider complaints about regulated CMCs.
What to read next
For a fuller picture of how to find legitimate financial help and what regulated advice looks like, the Getting financial advice guide is a useful starting point.
If debt is part of the picture, the Debt consolidation and Personal loans guides explain how regulated borrowing options work.
Sources
- Financial Conduct Authority (FCA), FCA Financial Services Register, FCA Warning List, FCA consumer guidance on scams and CMCs.
- UK Government, Action Fraud reporting service.
- MoneyHelper, consumer guidance on avoiding financial scams.