Claims management inquiry and bank account switching

The UK's Financial Conduct Authority (FCA) has launched a sweeping inquiry into the claims management industry after revelations of aggressive marketing, misleading ads, and unfair fees—particularly targeting victims of missold car finance from 2007 to 2024. A listener, 83-year-old Caroline from South Wales, shared her distress at being pressured by a claims firm to hand over personal documents without clear consent, highlighting the vulnerability of older consumers. FCA Director Alison Waters confirmed that while consumers can claim compensation for free through the Motor Finance Redress Scheme, many are lured by firms promising higher payouts, despite the risk of losing up to 30% in fees. The FCA is now intervening urgently, having already taken down 800 misleading promotions and helped 500,000 people avoid unfair charges—yet the full review won’t conclude until at least 2029. Meanwhile, bank switching remains stagnant despite £200 incentives, with only a million UK accounts changed in 2025. Fear of errors and complexity keeps most people loyal, even though 99.8% of switches complete within seven days. But a growing minority—like serial switcher Steve, who earned £1,300 from eight switches—see it as a game or income stream. Financial journalist Holly Mead, who switches every 12–18 months, says it helps her test banking features and reflects generational shifts: younger people lack the loyalty to banks that older generations had.