Experts have warned drivers to be cautious of fraudulent texts claiming they are entitled to thousands in mis-sold car finance compensation
Drivers are being urged to stay vigilant after people have reported scam text messages falsely claiming that recipients are owed thousands of pounds in compensation for mis-sold car finance agreements.
Compensation payouts on around 14 million unfair motor finance deals could start next year, with affected drivers receiving an average of £700 each, the Financial Conduct Authority (FCA) has said.
However, fraudsters are using this as an opportunity to try and scam people.
One such message, seen by The i Paper, tells recipients they “could be owed up to £2,382.58” and urges them to act quickly by clicking a link to “check for free” if they are entitled to the cash.
But the link raises immediate concerns.
At first glance, the site may look legitimate, but the domain ending in “.claims” is a major warning sign. Unlike genuine government or regulatory websites, which use secure domains ending in “.gov.uk” or “.org.uk,” this address is not official.
Another giveaway is the precise compensation figure quoted.
Recent reports reveal that the FCA is investigating mis-sold car finance, with around 14 million drivers potentially eligible for payouts averaging about £700 each.
Whilst some will get more, the inflated figure of £2,382.58 far exceeds official estimates.
Experts caution that fraudulent texts often use exact, inflated sums to create a false sense of legitimacy and lure victims into sharing personal information or clicking malicious links.
The combination of an unofficial domain and marketing-style language suggests this is likely a scam or lead-generation operation, not a genuine FCA-backed claims process.
The warning echoes a similar alert shared by Age UK, which recently posted about another car finance scam text circulating on social media.
Their Scams Awareness Team reported messages appearing to come from “MarvinLewis” – a name clearly intended to impersonate financial expert Martin Lewis.
The bogus texts claim to offer car finance refunds, directing recipients to a fake site. Age UK stressed that the real Martin Lewis has nothing to do with the messages and urged people to visit his official MoneySavingExpert website for legitimate information on the issue.
Industry specialists advise drivers to ignore unsolicited messages and only seek information through trusted sources like the FCA’s official website (fca.org.uk) or the government portal (gov.uk).
Lisa Webb, Which? consumer law expert, said: “If you receive a text about car finance out of the blue, treat it with suspicion and don’t click on any links.
“You can reach out to the company to check whether the message is genuine by using the official contact details listed on the company’s website, but consumers should be careful about signing up to any claims management companies offering to recover compensation for you as they will take a cut for something that you can do for free.
“You can also report scam texts by forwarding the message to 7726 – a free reporting service provided by phone operators, or alternatively you can take a screenshot of the text and send the image to report@phishing.gov.uk.”
If someone thinks they’ve fallen victim to a scam text, Webb advises them to contact their bank immediately.
This surge in scams comes amid ongoing investigations into the mis-selling of car finance deals.
Drivers who purchased vehicles between 2007 and 2021 are awaiting confirmation on whether they can claim compensation.
The FCA’s probe focuses on whether dealerships failed to fully disclose critical details about charges – especially relating to discretionary commission arrangements.
These arrangements, which allowed dealers to set higher interest rates and pocket bigger commissions, were banned in 2021, but their impact continues to ripple through the industry.
The FCA said it is aware of scammers contacting people and posing as car finance lenders, offering fake compensation and asking for personal details.
A spokesperson added: “There is no compensation scheme in place yet. If you’re contacted out of the blue like this, do not share any information.”
Payouts are likely to begin in mid-2026 at the earliest. You don’t need to use a claims management company or law firm to get your money.
