Motorists expecting refunds from a £9.1 billion car finance redress scheme are facing further delays after four firms launched a last-minute legal challenge against the Financial Conduct Authority’s (FCA) plans. The financial services arms of Volkswagen and Mercedes-Benz, the car finance arm of Credit Agricole, and a consumer group called Consumer Voice are seeking to quash the scheme, arguing its rules are unlawful.
The Upper Tribunal has agreed to hear these legal challenges in December or February of next year, with a judgment expected in the months that follow. Parts of the scheme have been suspended, meaning lenders are no longer required to calculate or pay compensation, or inform consumers of owed amounts, until the legal process concludes. If the tribunal upholds the scheme and there are no further appeals, payouts could potentially begin in 2027. Payouts were originally scheduled to commence this year but have already been postponed.