Motorists seeking compensation for mis-sold car finance are facing extended delays as four firms have lodged a legal challenge against the Financial Conduct Authority's (FCA) planned £9.1 billion redress scheme. The FCA has been compelled to pause payouts, pushing back the timeline for millions of consumers to receive potential refunds.
The Upper Tribunal has scheduled hearings for the legal challenges in either December or February of the upcoming year, with a judgment anticipated in the months that follow. The firms involved in the challenge include the financial services arms of Volkswagen and Mercedes-Benz, the car finance division of French bank Credit Agricole, and Consumer Voice, an organization representing consumer interests. These parties are seeking to have the scheme's rules overturned, arguing they are unlawful.
As a consequence of the legal challenge, parts of the scheme have been suspended. This means that lenders are no longer obligated to calculate or distribute compensation, nor inform consumers of any money owed, until the legal proceedings are concluded. If the tribunal upholds the FCA's scheme and no further appeals are lodged, compensation payments could commence in 2027.