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Aipedia: Claims management companies
AI can process motor finance commission claims at scale, but the representative remains responsible for checking existing representation and explaining fees. The FCA and SRA have found consumers with up to four representatives for one claim.
Part of: AI in Claims management companies
In short
Bulk AI sign-up and letter tools have helped CMCs and law firms handle large volumes of motor finance commission claims. A joint FCA and SRA message in February 2026, as reported, found clients with up to four representatives for one claim, and said firms should check for existing representation, explain termination fees clearly, keep records, and keep fees reasonable, proportionate and itemised. Duplicate sign-ups mainly create regulatory and fee disputes, which PI commonly does not cover. Negligent errors that cause a consumer real loss may fall within PI, subject to the wording.
Motor finance commission complaints are one of the largest volumes of consumer claims in recent years. CMCs and law firms use AI to run online sign-up journeys at scale, match customer details to lenders and agreements, draft complaint letters and DSARs in bulk, and chase responses. The speed that makes AI attractive also makes it easy to sign up a consumer who has already instructed someone else, or to send hundreds of near-identical letters without checking each file.
In February 2026 the FCA and SRA issued a joint message to professional representatives on motor finance claims. We have relied on a secondary report of that message because the FCA original was not retrieved. As reported, the regulators found clients with up to four representatives for a single claim. They said representatives should:
The same report said the SRA had 89 open investigations into 71 law firms at 31 January 2026.
The FCA's claims management market study, launched in May 2026, also covers professional representatives and lead generators, which includes the routes by which many motor finance claimants are signed up.
Illustrative scenario. A CMC's automated journey signs up thousands of consumers from purchased leads. Its matching tool flags no conflict where a consumer has already instructed a law firm, because the consumer used a different email address. Both representatives contact the lender. The consumer is then told they owe a termination fee to one of them, complains to the FOS and posts online. The CMC faces complaints across a batch of similar files and questions from the FCA about its onboarding controls.
Separately, AI-generated complaint letters may misstate the agreement dates or lender, weakening valid claims. Because the same template and the same model run across the whole book, one flaw can repeat in hundreds of files before anyone notices, which turns a single error into a remediation project.
Duplicate representation and fee disputes are mostly regulatory and contractual problems rather than negligence claims, so PI is often not the main answer. Refunding or waiving a CMC's own fees, regulatory fines and the cost of a past business review are commonly outside cover. Where a consumer can show the firm's negligence caused them a real loss, for example a missed complaint deadline, a PI policy may respond if one is held, subject to the wording. Many related claims arising from one flawed process may be aggregated, which can affect limits and excesses. See Does claims firm PI cover AI errors?.
Apex arranges PI for claims management companies handling financial services claims. A broker can explain how your policy treats bulk claim work, aggregation and fee disputes. Read more in AI in claims management and fair value under the Consumer Duty.
As reported, their February 2026 joint message said some motor finance clients had up to four representatives for one claim, and that representatives should run onboarding checks for existing representation, explain termination fees clearly and keep records.
The regulators said termination fees must be reasonable, proportionate and itemised, which for FCA-authorised firms falls under the Consumer Duty. A fee charged to a consumer confused by duplicate sign-ups is likely to attract scrutiny and complaints.
Ask the consumer directly at sign-up and record the answer, check your own records for the same agreement, and act quickly on any lender response saying another representative is already acting. Automated matching helps but should not be the only check, because consumers often use different contact details.
Usually not. Refunding the firm's own fees and paying regulatory penalties are commonly outside PI cover. PI is aimed at civil liability for negligence, so it may respond where a consumer suffers a real loss through the firm's error, subject to the wording.
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Start a PI quote Request a callbackApex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales, company number 07014570. This page is general information about how AI is used in the profession and how insurance may respond. It is not legal, regulatory or insurance advice on your circumstances, and it does not guarantee that cover will be available or on what terms.
