"Extreme" claims administration charges will likely be restricted – and it may save shoppers 1000’s
The upper limit applies to most remedies
It is proposed that the new cap should apply to all redress entitlements for which cash is granted, with the exception of PPI entitlements, which are already subject to a parliamentary cap of 20%. The FCA says this will save a few thousand pounds, with the total expected savings expected to be £ 9.6 million per year.
The proposals will also require claims management companies to tell consumers how the fees they pay will be calculated and identify free alternative means of redress before signing a contract.
A price cap consultation is now open through April 21 and the FCA and is expected to confirm their plans in the fall of 2021, followed by a cap. If the cap is approved, the FCA will monitor its impact on the market and consumers.
"Definitely the right step"
Martin welcomed the move and said it was "definitely the right move". He tweeted this morning: