‘No win no fee’ firms to reveal charges

 “No win no fee” claims firms will be forced to reveal their charges upfront and tell consumers about free alternatives under a planned crackdown by City regulators.

The new rules will come in four months before the PPI claims deadline in August 2019, just in time for an anticipated rush of consumers claiming redress for mis-sold policies.

It comes after the Financial Conduct Authority found claims firms were taking as much as half of claimants’ compensation as fees without making this clear. According to the FCA there is widespread misunderstanding of the term “no win no fee”.

Under draft plans published today by the regulator, from April 2019 firms advertising “no win no fee” services will be forced to disclose their charges in adverts to make it clear they are not offering a free service.

Where a free ombudsman scheme or a statutory compensation scheme exists in relation to the claim, the firms must also make this clear to customers.