The number of firms authorised to provide regulated claims management services in the UK has fallen to 483 – nearly half the number operating when the Financial Conduct Authority (FCA) first took over regulation of the sector, according to data obtained through a Freedom of Information (FOI) request.
The FOI request was submitted by Broadstone, an independent financial services consultancy. It found that the number of authorised claims management firms has declined every year since the FCA assumed oversight of the sector from the Claims Management Regulator in April 2019, when 942 firms were operating in the market.
The steepest single-year drop occurred between April 2020 and April 2021, when the number of firms fell 24% from 923 to 704. Broadstone said this was likely due to new FCA authorisation requirements, rules, and fees, as well as claims management companies anticipating the regulator’s later introduction of fee caps.
The decline has continued steadily since, with figures recorded at 685 in April 2022, 614 in April 2023, 544 in April 2024, and 516 in April 2025, before reaching the current figure of 483 in April 2026.
Broadstone submitted the FOI request following the FCA’s announcement in May of a review of the claims management sector. The regulator said the probe was launched “following concerns that consumers are being failed by some CMCs and law firms”.
“The sharp decline in the number of authorised claims management firms since the FCA took over regulation reflects a market that has come under far greater scrutiny and regulatory pressure in recent years,” said Phil Smith, head of redress at Broadstone. “Higher standards around governance, conduct, and consumer outcomes have undoubtedly raised the bar for firms operating in the sector.”
“While increased oversight has helped drive out some poor practices, the FCA’s decision to launch a fresh review highlights that concerns around consumer harm and poor behaviour have not gone away entirely. This has been reflected in the multiple warnings issued around the motor finance compensation scheme,” Smith added.
Smith also urged consumers to exercise caution before entering into agreements with claims management firms. “From a consumer point of view, people should fully understand what they are signing up to, what fees may apply, and whether free-to-access routes such as the Financial Ombudsman Service are available before entering into agreements,” he said.
The findings come amid a broader period of heightened regulatory activity in the sector. In January, the FCA opened an enforcement investigation into The Claims Protection Agency Limited (TCPA), a CMC operating in the motor finance claims space, following concerns about its advertising and sales tactics. The High Court dismissed TCPA’s judicial review challenge in October, and the Court of Appeal refused permission to appeal in December.
The regulator has also taken aim at misleading promotions more broadly: more than 800 misleading adverts have been removed or amended since January 2024, and the FCA has intervened with five CMCs causing harm, with two reducing exit fees and four agreeing to stop taking on new clients.
