Business · Companies · 2 hrs ago
Court challenge to UK motor finance compensation scheme set for February 2027
The UK’s Financial Conduct Authority plans a £9.1 billion scheme to compensate drivers mis-sold car loans between 2007 and 2024.
Three lenders—Volkswagen Financial Services, Mercedes Benz Financial Services and Credit Agricole Auto Finance—and the consumer group Consumer Voice are challenging the plan.
The Upper Tribunal will hear the cases from February 16 to 26, 2027, later than an earlier possible date in December.
An estimated 12.1 million agreements may qualify, with an average payout of £829.
The scheme is partly suspended while the legal challenge proceeds, so customers will wait longer for full payouts.
The FCA has told lenders to keep preparing and to progress complaints where possible.
It also says the scheme could be scrapped if the court rules against it, and the final outcome depends on the court challenge.
The UK Upper Tribunal will hear legal challenges to the Financial Conduct Authority’s £9.1 billion motor finance compensation scheme from February 16 to February 26, 2027.
Three lenders and consumer advocacy group Consumer Voice are challenging the scheme.
The scheme covers an estimated 12.1 million car finance agreements for loans mis-sold between 2007 and 2024.
Eligible customers are due an average payout of £829, but the scheme is partially suspended pending the court challenge.
The FCA has told lenders to keep preparing and to progress complaints as far as possible.
- Who
- Volkswagen Financial Services, Mercedes Benz Financial Services, Credit Agricole Auto Finance and Consumer Voice are challenging the FCA scheme.
- What
- The Upper Tribunal will hear their legal challenges to the motor finance compensation scheme.
- When
- February 16 to February 26, 2027.
- Where
- The UK Upper Tribunal.
- Why
- The challengers are contesting the FCA’s plans to compensate drivers who were mis-sold car loans. The sources do not state their specific grounds.
Challenging lenders and Consumer Voice
Financial Conduct Authority
Scheme
Challenging lenders and Consumer Voice
They are challenging the FCA’s plans to compensate drivers who were mis-sold car loans.
Financial Conduct Authority
The FCA has set out a scheme to compensate eligible drivers.
A potential hearing date was listed, but was later abandoned.
The Upper Tribunal is scheduled to hear the legal challenges.
- Scheme value
- £9.1 billion
- Eligible agreements
- An estimated 12.1 million
- Average payout
- £829
- Mis-sold loan period
- 2007–2024
- Hearing dates
- February 16–26, 2027
What people are saying
Consumer Voice is ready to take our challenge to trial with a potential hearing date listed for December 2026, which has now had to be abandoned.
The final hearing is now listed to take place in February 2027.
there may be no motor finance compensation scheme and no complaint handling pause
Sources
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