Motor finance claims: Big drop in complaints
Lawyers are bringing far fewer but “better evidenced” complaints on behalf of clients to the Financial Ombudsman Service (FOS), it said yesterday.
The fall in complaints brought by professional representatives (law firms and claims management companies) meant “more people – including vulnerable consumers – are bringing complaints directly to us, allowing a growing number to retain the full value of any redress awarded”.
Continuing the collapse in complaints since a case fee was introduced last year, professional representatives brought 4% (2,100) of the new cases in the last three months of 2025.
This compared to 9% (4,300) in the previous quarter and 43% (29,300) in the same period the previous year.
Since 1 April 2025, a professional representative can bring 10 cases for free each financial year but is charged £250 for each one thereafter. If the outcome goes in favour of the complainant, £175 is credited to the representative.
If it does not, the case fee for the financial business the complaint was made against is reduced from £650 to £475.
There is a statutory exemption for charities, family members and free advisory organisations, while the FOS remains free for complainants who come to it directly.
In all, FOS received 47,300 complaints between October and December 2025, similar to the previous three months and down from 68,400 cases in the same period in 2024.
“Professional representatives are now bringing better evidenced complaints, and we are seeing fewer withdrawn and abandoned cases,” it said.
“For the 2024/25 financial year, more than a third of complaints from professional representatives were withdrawn and/or abandoned and so far in this financial year (April 2025 to December 2025), this figure stands at 19%.
“These representatives are also bringing fewer irresponsible and unaffordable lending cases – between October and December 2025 there were 4,800 new cases compared to 13,200 in the same period the previous year.”
Another reason for the fall was the complaint-handling pause introduced by the Financial Conduct Authority in motor finance commission cases as it develops its redress scheme.
FOS received just 400 motor finance commission complaints in the quarter, compared to 14,400 a year earlier.
It added that “clarity from the Supreme Court has also enabled us to resolve more than 7,000 motor finance complaints in this quarter”. These were cases where “it is clear there was no unfair relationship between the lender and its customer”.
James Dipple-Johnstone, FOS’s interim chief ombudsman, said: “We are improving our service to ensure we can help underpin confidence in financial services now and in the future.
“Following a period of extraordinary demand, our case volumes are returning to a steady state as measures we have implemented ensure the complaints that come to us are better evidenced and ready to be investigated.”
FOS is currently working with HM Treasury and the Financial Conduct Authority to improve the dispute resolution system.
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