Fraudsters impersonate lenders and seek personal details, regulator says
The Financial Conduct Authority (FCA) has alerted the public to an increase in scam calls from individuals pretending to be car finance lenders.
According to the regulator, these callers are offering false compensation and requesting sensitive personal information, including names, addresses, dates of birth, and bank details.
The warning comes after the FCA announced plans to consult on a possible compensation scheme for motor finance customers. The regulator emphasised that no such scheme currently exists and that car finance lenders are not contacting customers regarding compensation at this time. Consumers are advised to end any suspicious calls immediately and refrain from sharing personal data.
“We’re aware of scammers calling people and posing as car finance lenders, offering fake compensation and asking for personal details,” said Nisha Arora, director of special projects at the FCA. “There is no compensation scheme in place yet. If anyone receives a call like this, hang up immediately and do not share any information.”
Last week, the regulator revealed it is preparing to consult on a redress scheme for motor finance customers. This follows recent legal decisions and regulatory probes into undisclosed commission arrangements between lenders and car dealers.
Industry scrutiny intensified after the Court of Appeal ruled in October 2024 that hidden car finance commissions were unlawful. The decision raised concerns that compensation claims could reach levels similar to the £30 billion payment protection insurance (PPI) scandal. In response, several major lenders — including Close Brothers, MotoNovo, Lloyds, Santander, and Barclays — temporarily paused new agreements as the FCA began its investigations.
The FCA stated it is working to provide certainty for consumers, firms, and investors after finding widespread failures to disclose commissions paid to dealers selling car loans. The regulator said it aims to ensure the motor finance sector operates fairly and upholds market integrity.
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