The FCA's spending on external PR agencies has surged past £500,000 since the beginning of 2024, driven primarily by the motor finance mis-selling scandal. This issue has led to billions in potential compensation payouts for major high street banks such as Lloyds, Barclays, and Santander, prompting the regulator to bolster its communication strategies.
A Freedom of Information request revealed that the FCA has allocated substantial funds to external PR firms to assist with its messaging on key issues, including the car finance debacle. The regulator cited the need for effective communication to inform consumers about financial tools and raise awareness regarding car finance compensation claims as a major factor in its heightened expenditure.
Notably, the fourth quarter of 2024 saw a significant peak in PR spending, reaching £180,000 – almost double the £98,000 spent in the preceding quarter. This period followed a crucial Court of Appeal ruling in October 2024, which sided with consumers in three landmark cases and prompted the FCA to broaden its review of car finance commissions across the industry.
The FCA has also been actively campaigning against claims management firms, expressing concerns about their 'aggressive marketing' tactics. The regulator is seeking to educate consumers that they do not need to use such firms to claim compensation. In September, the FCA engaged a team of influencers for a campaign across radio and online platforms to convey this message, coinciding with its second-largest spike in PR expenditure.
This communications offensive followed an August Supreme Court ruling that opened the door for an industry-wide redress scheme. While the FCA has since published the details of its redress programme, it has faced criticism from both the industry and consumer groups, with some accusing the regulator of misinterpreting the Supreme Court's judgment. The watchdog's ongoing 'Investsmart' project also contributes to its overall PR costs.