News of a possible car finance compensation scheme in the UK has given fraudsters a script. People report calls, texts and emails that say compensation is owed and ask for bank details. This guide summarises what the Financial Conduct Authority (FCA) says about the scams, the fees charged by claims firms, and how to check that a contact is genuine. It reflects the FCA’s pages as last updated on 16 September 2026 for the main consumer page, and it is general information, not financial or legal advice.
How the scam works
The FCA’s warning, first published in August 2025, says scammers pretend to be car finance lenders and falsely claim that people are owed compensation. The fraudsters ask for personal information including name, address, date of birth and bank details. At that stage the FCA stressed that no compensation scheme was in place and that lenders were not yet contacting customers about compensation.
The FCA’s advice for a call like this is to hang up immediately and not share any information. It also says scam calls and texts can be reported to Ofcom by forwarding them to 7726. The guide to where to report a scam in the UK explains how 7726 works alongside Report Fraud.
The FCA’s consumer page adds two checks. First, search the FCA’s list of car finance lenders and make sure the details a caller gives match those of the genuine firm. Second, be aware of scammers pretending to be from the FCA itself, which says it would never ask for money to be transferred to it and never ask for bank account PINs or passwords. Its March 2026 announcement also says consumers should not pay a fee to access compensation or share sensitive details such as a PIN or online banking details, and refers to a dedicated FCA motor finance scams helpline.
Where the scheme stands
The FCA’s consumer page says that anyone who used finance to buy a car, motorbike or van between 6 April 2007 and 1 November 2024 may be owed compensation because many lenders did not properly tell customers about certain arrangements between lender and broker. It states that its compensation scheme was legally challenged and that parts of it have been suspended. The case is due to be heard in either December 2026 or February 2027. Until the legal process ends, the FCA says lenders do not need to calculate or pay compensation under the scheme, and if the scheme is upheld and the judgment is not appealed, payments are expected to begin in 2027. The FCA’s advice is that the best step for someone with concerns is to complain to their lender. This position may change, so the FCA page should be checked directly.
That matters for scam-spotting. Anyone who calls claiming that compensation is ready to pay out now, or that a fee will release it, is making a claim inconsistent with the FCA’s own account of the scheme.
Claims management companies and law firms
Claims firms are a separate issue from scammers, but the FCA says nobody needs a claims management company (CMC) or law firm to take part in its scheme, and that a complaint to a lender can be made now for free. It warns that signing up to a CMC or law firm may mean paying for a service that is not needed, including up to 36% in fees, including VAT, out of any compensation received.
The FCA also advises:
- check whether a firm is authorised before signing;
- make sure you have not already signed up with another firm, because people sometimes sign up without realising it, and using more than one firm can mean fees to end an agreement, several representatives claiming success fees and delays;
- if leaving a firm, expect any exit fee to be reasonable and to match the work done, and ask for a breakdown if descriptions are vague, such as “case progression” or “file review”;
- if signed up without consent, or misled, ask to exit the contract for free.
Complaints about a CMC or law firm should go to the firm first. If the reply is unsatisfactory or there is none within 8 weeks, the FCA says they can go to the Legal Ombudsman for a law firm or the Claims Management Ombudsman for a CMC.
How to complain the free way
The FCA describes the route as: identify the lender, which may be found from old bank statements, the dealer, or a credit file; then contact the lender using its list of lenders, which includes contact details, a template letter and links to complaint forms. The lender should respond to say whether compensation is owed and how much, but the FCA says timing is uncertain while the challenge continues. A bank’s handling of scam payments follows a different route, covered in the guide to complaining to the Financial Ombudsman Service after a scam.
Frequently asked questions
Do I have to pay anyone to find out if I am eligible?
No. The FCA says there is no need to use a CMC to find out if you are eligible, and a person can complain for free without one.
The bottom line
Unexpected callers offering car finance compensation, especially if they ask for bank details or a fee, should be treated as suspect. The FCA says the scheme is partly suspended pending a legal challenge, that complaints to lenders are free, and that claims firms can take up to 36% of any payout. Checking the lender on the FCA’s list and forwarding scam texts to 7726 are the practical safeguards.
Sources
- Financial Conduct Authority, “Car finance claims”
- Financial Conduct Authority, “Beware car finance scam calls, FCA warns”
- Financial Conduct Authority, “Motor finance scheme partially suspended” (2 July 2026)
- Financial Conduct Authority, “Millions of car finance customers to get payouts this year as FCA goes ahead with compensation scheme” (30 March 2026)