The Financial Conduct Authority (FCA) has issued a warning about fraudsters impersonating car finance lenders and contacting consumers under the pretence of a compensation scheme.
This activity follows the FCA’s recent announcement that it will consult on a potential car finance compensation scheme. Criminals are exploiting this development by cold calling individuals, requesting personal information such as names, addresses, dates of birth and bank details. Victims are then told they are entitled to compensation, when in fact no such scheme currently exists.
Key points for the car finance sector to be aware of:
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There is no car finance compensation scheme in place at present.
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Legitimate lenders and brokers are not contacting customers about compensation.
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Scammers may attempt to use the names of well-known lenders or intermediaries to appear credible.
What firms should do:
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Be alert to the risk of impersonation and advise staff to handle any consumer enquiries with care.
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Consider issuing proactive communications to customers, making it clear that your firm is not contacting them about compensation.
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Report any suspected fraudulent activity to the FCA and Action Fraud.
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Review internal fraud prevention and call-handling processes to ensure vulnerable customers are protected.
The FCA’s message is clear: firms should remain vigilant, protect customer trust, and play an active role in reducing the risk of financial crime within the car finance sector.
Image provided by Juilieta Camila Tosto
