As millions of UK drivers await news on car finance compensation, scammers are already cashing in on the confusion.
The Financial Conduct Authority (FCA) has issued a warning about fraudsters posing as lenders and offering fake payouts to unsuspecting motorists. The calls and messages, which appear to be targeting people following recent headlines around the car finance scandal, are not legitimate.
Here’s what you need to know to stay safe.
A real car finance compensation scheme is coming. But it hasn’t launched yet
Earlier this month, the FCA announced plans to set up a compensation scheme for people who were charged unfair commission when taking out car finance – particularly in cases where dealers received higher payouts for arranging higher interest loans. This practice, known as Discretionary Commission Arrangements (DCAs), was banned in 2021.
The announcement came shortly after a Supreme Court ruling limited some types of legal claims but left the door open for payouts under an FCA-led redress scheme.
You can find out more about what happened here.
Although the FCA has confirmed the scheme is in development, it hasn’t launched yet. A six-week consultation will run later this year, and if approved, payouts could begin in 2026. Most are expected to be under £950, though some may be higher depending on the agreement.
The scam: what to watch out for
Since the FCA’s announcement, reports have emerged of people being called by fraudsters pretending to be car finance companies or legal firms. These scammers may offer fake compensation and ask for personal information such as:
- Bank account details
- National Insurance numbers
- Security codes or PINs
None of this is required and no official scheme is in place yet.
If someone contacts you about car finance compensation out of the blue, it’s very likely a scam. Hang up, delete the message, and don’t click any links. Crucially, don’t give out personal details. The FCA will never ask for your PIN, password, or bank login.
The FCA has also repeated its warning about claims management companies (CMCs) and unregulated law firms encouraging people to sign up early. The regulator has promised to keep the process free, fair and straightforward, so you won’t need to use a claims management company or a law firm to make a claim.
The bottom line
Stay cautious. If something feels off, it probably is. And if you’re not sure whether you’re eligible for compensation, wait for official guidance from the FCA. There’s no rush – and no need to hand over personal details to anyone.
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