FCA warns motorists of fake car finance compensation calls

The Financial Conduct Authority (FCA) has issued a fresh warning about scam calls and texts targeting UK motorists, after reports that fraudsters are impersonating car finance lenders and claiming drivers are owed compensation.

According to The Guardian, scammers have been contacting people directly, sometimes citing car details, and promising payouts of up to £16,000. Victims are then asked to hand over sensitive personal information such as their name, address, date of birth, and bank details in order to “process” claims.

The FCA said these approaches are fraudulent and stressed several key points:

• There is no car finance compensation scheme in place yet.
• Car finance lenders are not contacting customers about compensation.
• No legitimate contact will occur before October 2025.
• Actual payouts are not expected until 2026.

Consumers who receive unsolicited calls or texts are urged not to share personal details, to hang up immediately, and to report suspicious messages by forwarding them to 7726, Ofcom’s spam reporting service.

The warning follows the regulator’s announcement that it will launch a consultation in October 2025 on a potential compensation scheme for mis-sold car finance deals, a scandal that could cost lenders between £9 billion and £18 billion. The scheme is being designed to address concerns about discretionary commission arrangements (DCAs), where brokers had incentives to set customers’ interest rates higher than necessary.

While the Supreme Court recently narrowed lenders’ liability, millions of drivers may still be eligible for compensation once the scheme is finalised. Until then, the FCA advises motorists to wait for official communications only and ignore any third-party approaches.