Before you reply to a text promising fast cash, check 3 things: whether the lender is authorised by the Financial Conduct Authority, what the loan will actually cost, and whether anyone is asking you to pay money upfront. Those checks take a few minutes, and they can save you from an unaffordable debt or an outright scam.

You know the sort of message. It lands late at night, says you have been pre-approved for £1,000, and pushes you to click a link before the offer expires. The urgency is the warning sign. A genuine lender should not need you to decide in 90 seconds. The pressure is there because someone is hoping you will skip the checks.

Check 1: is the lender actually authorised?

Most firms offering consumer credit in the UK must be authorised by the FCA or have the correct permission through an appointed representative arrangement. Before sharing personal details, check the firm on the FCA Financial Services Register or use the FCA Firm Checker.

Look for an exact match. The trading name, website, phone number and permissions should line up. If the name in the text does not match the register, treat that as a stop sign. Fraudsters often clone real firms by using similar names, logos or licence details.

Be especially wary of upfront payment requests. The FCA warns about loan fee fraud, where victims are asked to pay a “release fee”, “insurance”, “admin charge” or “guarantor fee” before receiving a loan that never arrives. If you have already paid one, it is worth reading about how to recover money sent digitally before the trail goes cold.

Check 2: what will it really cost?

High-cost short-term credit is capped by FCA rules. Interest and fees must not exceed 0.8% per day of the amount borrowed. Default fees are capped at £15. The total amount you pay in interest, fees and charges must never be more than the amount you borrowed.

So, if you borrow £200 for 30 days and repay on time, the cost of credit should be no more than £48. If you default, the lender can charge a default fee of no more than £15, but the total cost cap still applies.

The FCA’s price cap on high-cost short-term credit explains how the rules work. If a text quotes figures above those limits, hides the true cost, or refuses to show an APR and repayment schedule clearly, walk away. The same caution applies to high-interest credit cards marketed through aggressive messages.

Check 3: can you afford it, and did they check?

This is the part many borrowers overlook. A regulated lender must carry out a reasonable creditworthiness assessment before lending. That means looking at whether you can repay without being pushed into financial difficulty, not just whether the lender is likely to get its money back.

If a lender gave you money without proper affordability checks, and you then had to take top-up loans and rollovers just to stay afloat, that may point to irresponsible lending.

For example, someone borrows £300 for a car repair, then borrows again the next month to clear the first loan. Within 6 months, they are juggling several lenders. If nobody properly checked their income, bills and existing debts, that pattern may support a payday loan refund claim.

If you have already borrowed

You do not need a spam text to have a claim. There are clear signs you could be owed a refund, and repeat borrowing is one of the strongest.

Where a loan should not have been granted, the Financial Ombudsman may tell the lender to refund interest and charges, add interest where appropriate, and remove negative credit file entries linked to unaffordable lending. Claim outcomes depend on the evidence, but refunds for the interest and charges are a common remedy where lending was irresponsible.

Claim First does not only handle credit. The same team supports people looking to recover money lost to a scam, pursue a mis-sold finance case, or seek housing disrepair compensation, all on a no win, no fee basis.

Frequently asked questions

Are loan text messages a scam?
Not always, but many are. Some come from unauthorised firms, some are lead generators, and some are outright fraud. Always check the sender against the FCA Register before responding.

How do I stop spam loan texts?
Do not reply. Forward suspicious texts free to 7726, then block the sender.

What is the most a payday lender can charge in the UK?
Interest and fees are capped at 0.8% per day, default fees at £15, and total charges must not exceed the amount borrowed.

Can I get a refund on a payday loan?
Possibly. If a lender gave you credit you could not afford without proper checks, you may be able to reclaim interest and charges.

Do the checks, then act

Treat every unexpected loan text as unproven until you have confirmed the lender and the cost. If you have already paid for credit that was never affordable, you may be owed money back. Claim First can review your borrowing history and tell you where you stand, with no upfront cost. Get in touch today to start your claim.