Your rights when using a claims management company – and free alternatives to ensure you keep all of your compensation.
In this guide…
What you need to know about using a claims management company
What is a claims management company?
A claims management company (CMC) is a business that helps people pursue compensation claims in return for a percentage of any money recovered. They typically handle complaints, submit paperwork and correspond with companies or ombudsman services on your behalf.
CMCs are not law firms. They are generally not solicitors and do not provide legal advice or representation. While some may refer cases to lawyers if court action is needed, their core role is administrative — managing forms, evidence and communication rather than acting as your legal representative.
The industry grew rapidly during the PPI mis-selling scandal, when large numbers of people were entitled to refunds and CMCs offered to handle claims for a share of the compensation. Following concerns about high fees and poor practices, regulation was brought under the Financial Conduct Authority (FCA), which introduced stricter rules and fee caps.
More recently, CMCs have been active in car finance commission complaints, raising similar questions about fees, marketing practices and the value they add compared with claiming yourself.
It’s important to understand that CMCs use the same complaint processes that are freely available to you. They do not have special legal powers, and in many cases they are completing forms and managing correspondence that you can do yourself for free.
It’s also important to distinguish between claims management companies and law firms. CMCs do not provide legal advice or representation. Law firms, by contrast, are regulated legal professionals who can take cases to court and are subject to different professional standards. While both may charge fees, they operate in different ways and offer different levels of service.
If you’ve already signed up with a law firm or a claims company, check what you’ve agreed to. Some charge a percentage of your compensation, while others may add legal fees if your case progresses. Understanding your contract is essential before continuing or switching.
What do CMCs actually do for their fees?
Understanding what CMCs provide helps you decide if their services are worth 15-30% of your compensation:
Services CMCs typically offer:
Initial assessment:
- Review whether you have a valid claim
- Explain likelihood of success
- Estimate potential compensation (You can often get this same assessment free from Citizens Advice or ombudsmen)
Paperwork and administration:
- Complete complaint forms on your behalf, including drafting written statements that outline your case
- Identify which complaint process applies (company complaints procedure, Financial Ombudsman, tribunal, etc.)
- Gather and organise supporting evidence such as contracts, statements, medical records, correspondence or policy documents
- Request additional documents from companies if needed
- Structure your claim to align with legal or regulatory requirements
- Submit claims within required deadlines
- Track timelines and ensure procedural steps are followed correctly
- Chase responses from companies or ombudsman services
- Respond to procedural queries or requests for further information
Liaison with companies:
CMCs communicate with the company on your behalf and handle the back-and-forth correspondence, including negotiating settlement offers and responding to requests for further information. This can reduce the stress of managing the dispute yourself.
However, companies are required to respond to you directly in the same way they would to a CMC. In most standard complaints processes, using a claims company does not result in preferential treatment.
Connecting you with lawyers:
- For complex cases requiring legal action
- Usually work with specific law firms
Connecting with solicitors may involve additional legal fees on top of CMC fees. You can find no-win-no-fee solicitors yourself. Or, look at free alternatives as most ombudsman and tribunal forms are designed to be simple enough to complete yourself, and guidance notes are usually provided.
Your rights when using claims management companies
If you have been mis-sold a product or service or suffered a personal injury you might decide to use a CMC to help you claim compensation.
A CMC should be able to give you advice on the likelihood of your claim being successful. It will offer services to help you investigate your claim, deal with the paperwork and, if necessary, put you in touch with lawyers.
Most CMCs are regulated by the Financial Conduct Authority and must do the following:
- Provide you with a 1-page summary of all key information before you sign a contract
- Give you a detailed breakdown of your fees, including examples (sometimes called a ‘cost illustration’)
- Offer you a 14-day cooling off period during which you can cancel your contract without any penalty
- Keep you updated as your claim develops
- Tell you about other routes for making complaints – for example, by complaining to the Financial Ombudsman
- Ask you to explicitly confirm you don’t want to make a claim by yourself for free
If you’re unhappy with your CMC’s service, follow these steps:
Step 1: Complain in writing to the CMC
- Explain what went wrong
- State what you want (refund, contract cancellation, compensation)
- Give them 8 weeks to respond
- Keep copies of all correspondence
Step 2: Escalate to the Financial Ombudsman (if no resolution)
- Free, independent service
- Can order the CMC to compensate you or cancel your contract
- Must have complained to the CMC first
- Ombudsman decision is binding on the CMC
Common reasons to complain:
- Didn’t tell you about free claiming routes
- Charged more than the fee cap
- Poor communication about your claim
- Misled you about chances of success
- Contacted you without permission
- Didn’t provide required pre-contract information
There are things CMCs should not do too:
- Send you emails or text messages, unless you’ve agreed to receive them
- Make marketing calls to you unless you’ve explicitly agreed to them
- Approach you in person
- Use high-pressure selling techniques – like asking you to make on-the-spot decisions
- Charge you more than the maximum fee or % charge based on your claim value.
Who regulates claims management companies?
CMCs providing regulated claims services must be authorised by the Financial Conduct Authority. Services can include:
- Financial services and products (e.g. car finance mis-selling or PPI claims)
- Personal injury (e.g. medical negligence or road traffic accidents)
- Employment problems (e.g. unfair dismissal or treatment or injuries caused by work)
- Criminal injury (e.g. physical or mental injury caused by criminal activity)
- Housing disrepair (e.g. harms caused by tenants due to things like electrical faults, mould and damp, leaks or floor or insect infestation)
If you decide to use a CMC for claims related to any of these areas then check they are on the Financial Conduct Authority register.
Law firms providing claims management services tend to be regulated by one of the legal regulators:
Fees you can expect to pay a CMC
A CMC will charge you a fee for using its services. The Financial Conduct Authority introduced price caps to the fees CA CMC will charge you a fee for using its services. The Financial Conduct Authority introduced price caps to the fees CMCs can charge for claims starting on or after 1 March 2022.
| Value of your claim | Maximum % you can be charged | Maximum fee you can be charged |
| £1 to £1,499 | 30% | £420 |
| £1,500 to £9,999 | 28% | £2,500 |
| £10,000 to £24,999 | 25% | £5,000 |
| £25,000 to £49,999 | 20% | £7,500 |
| £50,000 or more | 15% | £10,000 |
The fee cap works like this: CMCs can charge up to a certain percentage OR a maximum fee, whichever is lower. For example, on a £15,000 claim, a CMC could charge 25% (£3,750) or the maximum fee of £5,000 – they’d charge £3,750 because it’s lower.
Only claims regulated by the Financial Conduct Authority are covered by these price caps. Read advice on using a ‘no win, no fee’ firm to ensure you go into these contracts having fully considered the risks.
Free ways to claim for compensation
In many cases, claiming for free is simpler than people expect and means you keep 100% of your compensation. Some people choose to use a CMC for convenience, while others may prefer a law firm where legal scrutiny or representation is needed. But it’s worth checking whether you can make the claim yourself first – for many common types of claim, a free route is available.
Here are other examples of free ways to make complaints and claims:
| Type of claim | Free compensation help |
| Criminal injury claims | You can claim compensation for free if you’ve been a victim of a violent crime. |
| Employment claims | You can make a claim to an employment tribunal and get free employment advice from ACAS. |
| Financial product or service claims | You can escalate unresolved complaints or claims to the Financial Ombudsman Service. |
| Financial firms going out of business or owing you money | Make a claim for free by using the Financial Services Compensation Scheme. |
| Housing disrepair claims | The Housing Ombudsman Service can help you make residential claims. |
| Pension claims | Free routes for getting compensation for a pension problem. |
Problems to watch out for with CMCs
When using a claims management company, be alert to poor practices, hidden costs and warning signs that indicate that the firm may not be acting in your best interests.
Fee and contract issues
Common problems include:
- Fees not being clearly explained before you sign
- No detailed written breakdown with worked examples (which CMCs must provide)
- Fees changing during the course of your claim
- Being asked to pay upfront fees
- Vague explanations about percentages or final amounts
Always check the FCA register before signing anything – unregulated firms offer no consumer protections, and regulated firms must comply with FCA fee caps.
Communication and conduct problems
You should also be cautious of firms that:
- Provide poor updates or are difficult to contact
- Cause unnecessary delays
- Fail to follow your instructions
- Pass your claim to another company without telling you
- Operate as “lead generators” and sell your details on
Cold calls, unsolicited texts and emails are banned, so avoid firms that contact you out of the blue.
Clear red flags
Avoid CMCs that:
- Promise “guaranteed success” or claim a “100% success rate”
- Quote specific compensation amounts before assessing your case
- Pressure you to “sign now” or suggest you’ll lose out if you don’t act immediately
- Ask for sensitive information such as passwords, PINs or full banking details at an early stage
No CMC can guarantee you’ll win, and compensation depends on your individual circumstances. If something feels wrong, take your time, check the FCA register and remember you can usually make a claim yourself for free.
How to complain about a problem with a CMC
If you’re unhappy with the service that’s been provided by a CMC then the first thing to do is make a formal complaint to the firm you’ve been dealing with. Explain the problem and tell them what you want them to do to put things right.
FCA-regulated CMCs should confirm receipt of your complaint and then have up to eight weeks to resolve it. If you’re unhappy with their response or they don’t respond at all then you can escalate your complaint to the Claims Management Ombudsman, which is part of the Financial Ombudsman Service.
The ombudsman is an independent dispute resolution service, and it’s free and easy to use. It can handle group or individual complaints. It will investigate your complaint, talk to the company and then decide whether to uphold your complaint. The firm must comply with any decision from the ombudsman.
Frequently Asked Questions about claims management companies
In many cases, you can make a claim yourself for free. CMCs use the same complaint processes that are available to anyone, and they don’t have special legal powers. Some people choose to use a CMC for convenience, while others may prefer a law firm if their case requires legal scrutiny or representation. It’s worth checking whether you can claim for free first, as this means you keep 100% of any compensation.
A claims management company (CMC) helps manage your claim by handling paperwork and communication, but does not provide legal advice or representation. A law firm is made up of qualified legal professionals who can give legal advice and take cases to court if needed. Both may charge fees, but they offer different types of service, so it’s important to choose based on how complex your case is.
Before you sign a contract, a regulated CMC must give you a one-page summary of key information and a clear breakdown of their fees with worked examples. They must tell you about free ways to make your claim and ask you to confirm that you understand you can do this yourself. You should also be given a 14-day cooling-off period to cancel without penalty.
Avoid firms that promise guaranteed success or quote compensation amounts before properly assessing your case. No CMC can guarantee you’ll win. Be cautious of pressure to sign quickly, unclear fees or poor communication. Always check the firm is authorised by the Financial Conduct Authority (FCA). If you’re considering a law firm instead, check how their fees work and whether legal representation is actually needed for your situation.
CMCs providing regulated claims services must be authorised by the Financial Conduct Authority (FCA). You can check any firm on the FCA register before using them. Law firms are regulated separately by legal regulators such as the Solicitors Regulation Authority.
Start by making a formal complaint to the CMC in writing. Explain what went wrong and what you want them to do to put things right. They have up to eight weeks to respond. If you’re unhappy with their response, or they don’t reply, you can take your complaint to the Financial Ombudsman Service.
It’s free to use, and the CMC must follow its decision.
No. CMCs are not allowed to send unsolicited texts or emails, make marketing calls without your consent or approach you in person. If a firm contacts you without permission, treat it as a warning sign and avoid them. You can also report them to the Financial Conduct Authority.
About Consumer Voice
Consumer Voice helps people get back money they may be owed when companies get it wrong. We explain your rights clearly, so you can understand whether you may be owed compensation, whether you can join a claim, and what steps to take next.
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