Recommendation 157

Several witnesses suggested that some CMCs are exploiting the disparity between FOS decisions and FCA rules. The Finance & Leasing Association suggested that firms complying with FCA rules can still find themselves embroiled in mass redress events and that this “generates regulatory uncertainty which provides an opportunity for claims management company activity, introduces additional risk to the operation of the market and increases the cost of finance to the end customer—all of which is detrimental to economic growth.” 238