Part 2: Claims Management Services Charges for claims management services Section 28: Power of FCA to make rules restricting charges for claims management services
This section amends the Financial Services and Markets Act 2000. Subsection (2) inserts a new Section 137FD into Part 9A (Rules and Guidance) of the Act. The new Section gives the Financial Conduct Authority the power to make rules to cap the amount that claims management companies can charge consumers. The Financial Conduct Authority must make rules for services provided in relation to the making of a claim in connection with financial products and services.
	The rules must be made with a view to securing an appropriate degree of consumer protection against excessive charges claims management companies can charge consumers for its services. Subsection 137FD(5) provides that the rules may provide for agreements to be unenforceable, amounts paid under an agreement to be recovered and compensation to be paid for losses where a consumer has been charged in contravention of rules imposing fee caps.
	Subsection (3) amends Section 138E(3) of the Act which deals with the limits of the effects of contravening Financial Conduct Authority rules. A transaction or contract which contravenes the rules in relation to charges for claims management services made under Section 137FC will be rendered void or unenforceable.