Allegiant Finance Services, a leading Claims Management Company (CMC) that has reclaimed over £100 million for victims of unaffordable subprime lending, has expressed deep concern over the Financial Ombudsman Service’s (FOS) recent decision to impose a £250 fee per claim on CMCs. This announcement, released on Friday 7 February, has raised alarm within the industry, as it could have a discriminatory impact on vulnerable consumers.
The newly confirmed £250 flat fee applies to all claims, regardless of their value. This includes claims as small as £50, which could make it economically unfeasible for CMCs to represent clients in disputes against lenders. This could leave many victims of unaffordable lending without access to professional support in seeking justice.
Allegiant has long argued that this fee structure disproportionately affects certain demographics, particularly those affected by unaffordable lending in the subprime sector. Studies have shown that individuals from minority ethnic groups and financially excluded communities are more likely to rely on high-cost credit. By making professional representation unviable for lower-value claims, the FOS fee structure creates a barrier to justice for these groups.
In response to this decision, Allegiant’s Head of Product, a former contractor within FOS’s unaffordable lending team, warns that the £250 flat fee “threatens to shut out consumers with modest claims.” They also point out that even small payouts can be life-changing for many individuals. Additionally, Allegiant’s Director Jemma Marshall states that this is discrimination in plain sight and that FOS’s suggestion for consumers to complain directly is not a viable solution for many.
With the Treasury Select Committee set to question FOS’s interim leader on Tuesday, Allegiant urges MPs to scrutinise the policy’s potentially unlawful impact. They argue that if the fee structure economically excludes lower-yield claims linked to protected characteristics, it must be revised or scrapped altogether. Allegiant further urges FOS to reform its approach to ensure equality in access to justice.
For media inquiries, please contact Allegiant at jemma.marshall@allegiant.co.uk or stephen.griffiths@allegiant.co.uk.
This news story was distributed by https://pressat.co.uk/
