Archive · 1 Sep 2026
FCA Faces Challenge Over Alleged Threat to Consumer Group
The UK financial regulator has proposed a £9.1 billion plan to compensate some car finance customers.
These customers may have paid too much because of commission arrangements between dealers and lenders.
A consumer group called Consumer Voice thinks the plan does not give people enough money.
It says the average payment would be about £830 for each affected loan.
The group says FCA chief executive Nikhil Rathi warned it about possible consequences if it challenged the plan in court.
The FCA says it does not recognise that account.
It says officials were explaining what legal action could mean and that the scheme is the best way to pay consumers.
The Upper Tribunal will consider the legal challenge and the disagreement over how the FCA handled it.
Consumer Voice alleges FCA chief executive Nikhil Rathi discouraged it from challenging the £9.1 billion car finance compensation scheme.
The group claims Rathi warned the FCA might stop collaborating with it and brief against it if legal action proceeded.
The FCA disputes that account and says officials were explaining the consequences of litigation while defending its compensation plan.
The scheme could compensate millions of motorists over dealer-commission arrangements involving car finance between 2007 and 2024.
Consumer Voice argues the proposed average payment of about £830 per affected loan is insufficient and is seeking larger payouts.
- Who
- The Financial Conduct Authority, its chief executive Nikhil Rathi, Consumer Voice, specialist lenders and affected motorists.
- What
- A legal dispute over the FCA’s £9.1 billion car finance compensation scheme and allegations that Consumer Voice was discouraged from challenging it.
- When
- The alleged conversation took place on April 27; the compensation arrangements cover car finance from 2007 to 2024.
- Where
- The case is being considered by the Upper Tribunal in the United Kingdom.
- Why
- Consumer Voice wants larger compensation for motorists, while the FCA wants its proposed scheme to proceed as the route to paying consumers.
Consumer Voice’s position
Financial Conduct Authority’s position
Adequacy of compensation
Consumer Voice’s position
The proposed average payment of about £830 per affected loan undervalues consumers’ losses and gives too much weight to lenders’ interests.
Financial Conduct Authority’s position
The FCA says its scheme is the best structured route for getting compensation to millions of consumers.
Alleged warning to challenge
Consumer Voice’s position
Consumer Voice says Nikhil Rathi warned that the FCA might stop collaborating with it and that legal action could have adverse consequences for its relationship with the regulator.
Financial Conduct Authority’s position
The FCA disputes that characterisation and says officials were explaining the consequences of legal action and defending the scheme.
Consumer Voice’s relationships and funding
Consumer Voice’s position
Consumer Voice says it works with law firms to help consumers recover money from companies accused of rule-breaking; its lawyers are acting pro bono.
Financial Conduct Authority’s position
The FCA has questioned the group’s funding and business relationships, including links with Courmacs Legal and possible commercial incentives.
- Compensation scheme value
- £9.1 billion
- Potential recipients
- Millions of motorists
- Affected finance period
- 2007 to 2024
- Proposed average payment
- About £830 per affected loan
- Consumer group
- Consumer Voice
- Regulator
- Financial Conduct Authority
- Legal forum
- Upper Tribunal