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The Financial Conduct Authority (FCA) has announced a landmark compensation scheme for drivers who were mis-sold car finance deals. However, this news has unfortunately led to a surge in scam calls targeting unsuspecting motorists. Authorities are urging drivers to be extremely cautious and vigilant to avoid falling victim to these fraudulent schemes.

What's Happening?

Following a lengthy investigation, the FCA determined that many car finance agreements arranged between April 2008 and March 2020 may have been unlawful. This is primarily due to the fact that brokers weren't always transparent about commissions they received from lenders. The FCA estimates that up to 1.5 million drivers could be entitled to compensation, potentially totalling billions of pounds.

The Scam Tactics

Scammers are exploiting this situation by posing as representatives of the FCA or compensation claim companies. They often employ high-pressure tactics, demanding upfront fees or personal information to process a claim. Here's how they operate:

• Cold Calls & Texts: Expect unsolicited calls or texts promising a quick and easy payout.
• Upfront Fees: Legitimate compensation schemes do not require upfront fees. Be wary of anyone asking for money before a claim is assessed.
• Personal Information: Scammers will try to obtain your bank details, driving license number, or other sensitive information.
• Urgency & Pressure: They'll create a sense of urgency, claiming you have a limited time to claim and risk missing out.

How to Protect Yourself

The FCA and consumer groups are providing clear guidance to help drivers stay safe:

• Never Give Out Personal Information: Do not share bank details, driving license numbers, or any other sensitive information over the phone or in response to unsolicited emails or texts.
• Verify the Caller: If you receive a call, independently verify the caller's identity. Hang up and call the FCA directly using a trusted number (available on their website: www.fca.org.uk) or contact your bank.
• Be Suspicious of Upfront Fees: Remember, legitimate claim handlers do not charge upfront fees.
• Report Suspicious Calls: Report any suspicious calls to the FCA and Action Fraud (0300 123 2040).
• Understand the Claims Process: The FCA's compensation scheme is being set up and details on how to claim will be released soon. Be patient and avoid rushing into anything.

The FCA's Compensation Scheme

The FCA is establishing a dedicated compensation scheme to handle claims. While the exact details are still being finalised, it's expected to be a streamlined process. Drivers who believe they were mis-sold car finance should wait for official announcements from the FCA before taking any action. Numerous reputable claim management companies are also preparing to assist, but ensure you thoroughly research any firm before instructing them.

Stay Informed

Keep up-to-date with the latest information and warnings on the FCA website and through reputable news sources. Protect yourself from falling victim to these scams and ensure you receive any compensation you are rightfully entitled to.