The FCA has warned consumers to be wary of car finance “money tips” adverts circulating on social media. As part of a joint regulatory taskforce, the regulator has identified a growing number of promotions that appear to offer independent advice but are in fact paid promotions from claims management companies (CMCs) and law firms encouraging people to sign up for car finance claims.

The adverts of concern typically pose as impartial advice without disclosing they promote a business, misuse logos and imagery from well-known brands or public figures to imply endorsement, and fail to make clear that consumers can claim for free.

The regulator recently banned adverts from one CMC that used edited, unauthorised clips of Money Saving Expert’s Martin Lewis to make misleading compensation claims. Following regulatory action, one firm has agreed to remove all its adverts.

Alison Walters, director of consumer finance at the FCA, said accessing compensation is free and consumers need not use a CMC or law firm to recover what they are owed.

“If they choose to, it should be a genuine and well-informed choice, not one made because of a misleading advert,” she explained.

Consumers who use such firms may pay fees exceeding 30% of any compensation, and signing up with more than one firm risks multiple charges. The regulator highlighted widespread poor practice, including unwanted texts and emails that have driven six million complaints to the Information Commissioner’s Office this year, consumers being signed up without consent, and aggressive pursuit of unfair exit fees.

Those misled into signing up can ask to exit contracts for free, may be owed compensation, and can escalate complaints to the Claims Management Ombudsman or Legal Ombudsman at no cost.

In a parallel development, the FCA has signalled that fake online reviews could create Consumer Duty risks for advisers, mortgage brokers, wealth managers, insurers and investment firms. Its guidance states that misleading or inauthentic information, where it materially affects how consumers understand products or services, could undermine consumer outcomes.

A FCA spokesperson said firms must communicate in a way that is fair, clear and not misleading, and act swiftly when aware of deceptive reviews.

The move follows the Digital Markets, Competition and Consumers Act 2024, which banned fake reviews and strengthened the Competition and Markets Authority’s (CMA) enforcement powers. In March, the CMA launched five investigations across sectors including funerals, food delivery and car sales.