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FCA Fee Cap on CMCs

Updated: May 18, 2022

You will be aware that the FCA’s price cap is coming into existence on 1 March 2022.

As a quick primer, this means there will now be five redress bands with a maximum fee charged per band.

What are some of your requirements:

The fee cap requires your firm to

  • provide your customers with a fee illustration for each of the redress bands

  • ensure that your fees are reasonable in cases where fees charged on non-PPI financial products and services claims are outside the scope of the cap

  • follow existing rules (CMCOB 6.1.7) to promptly give customers an estimate of the fee they will pay at the point your firm has sufficient information to reasonably estimate the fee, and, if applicable, to tell customers why the fee payable will differ from the illustration

  • make clear to consumers where relevant that they may need to pay a CMC fee out of other funds

  • provide illustrations within each fee band applicable to your customer and test and adapt communications aligned to this fee band. In instances, where your customers are likely to have redress that is not paid out to them in cash, it is preferred that you help them understand the fees they will pay in those circumstances

  • disclose key information to consumers at the pre-contract stage, to help consumers make better-informed decisions about using your services