Millions of UK motorists awaiting compensation for mis-sold car finance agreements face further delays after legal challenges to the Financial Conduct Authority's £9.1 billion redress scheme will be heard by the Upper Tribunal from February 16 to February 26, 2027.
The FCA said the scheme could cover about 12.1 million finance agreements made between 2007 and 2024, with average compensation estimated at £829 per customer. Payouts remain on hold while the court process continues.
The legal action was brought by Volkswagen Financial Services, Mercedes-Benz Financial Services, and Credit Agricole Auto Finance, while consumer group Consumer Voice is also challenging the regulator's approach.
The FCA said lenders must continue preparing for the scheme and handling complaints where possible. The regulator warned firms to prepare for the possibility that the court could overturn the plans.
"Our scheme is the quickest, fairest and most efficient way to compensate consumers and we will defend it robustly," the Financial Conduct Authority said.
The FCA said that if the scheme or parts of it are cancelled, there could be no industry-wide compensation program and no pause on complaint handling, requiring firms to follow normal complaint processes.
"Lenders should plan for the possibility that, if the scheme or parts of it are quashed, there may be no motor finance compensation scheme and no complaint handling pause. In that scenario, lenders would need to be operationally and financially ready to resolve complaints through the usual complaint-handling process and within the usual statutory timescales," the Financial Conduct Authority said.
Consumer Voice co-founder Alex Neill said the hearing delay followed disputes over evidence disclosure, additional data requests, and expert analysis. The group said the case had previously been expected to proceed in December 2026.
"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. The FCA and lender applicants blame each other for the delay. The FCA’s approach to disclosure has been heavily criticised by all parties whilst the FCA blames the lenders’ requests for extensive disclosure of underlying data and reliance upon fresh expert evidence as the cause of the trial being pushed into next year," said Alex Neill, co-founder of Consumer Voice.
Consumer Voice has argued that the proposed redress rules could leave consumers receiving less than they believe they are owed. The group is represented in the challenge by claimant firm Courmacs Legal.
"We remain resolute and confident in our challenge, the only one made on behalf of millions of consumers who are being short-changed by the redress scheme," said Alex Neill, co-founder of Consumer Voice.
Kevin Durkin, solicitor-advocate and director of HD Law, said demand for compensation claims has increased while the legal dispute continues.
"Drivers are quite rightly fed up with waiting. We’ve seen a 311% rise in claims compared with the same time last year, reflecting the growing appetite among consumers to pursue the compensation they believe they are owed. We expect demand to continue for as long as the scheme remains tied up in judicial review proceedings. Based on our experience successfully representing consumers through the court system, we believe that more than 45% of claims will still need to be pursued through litigation, even if the FCA scheme comes into force, whenever that may be," said Kevin Durkin, solicitor-advocate and director of HD Law.
Volkswagen Financial Services said it supported compensation for customers who were genuinely disadvantaged but challenged whether the FCA proposal was fair and lawful.
"We have consistently said that we support redress where customers have been genuinely disadvantaged. However, it is important that any scheme is fair, properly targeted, and lawful. We do not believe the FCA's proposed scheme meets those principles, which is why we have brought this appeal. The tribunal's decisions will ensure that it has access to the evidence necessary to properly assess the FCA's proposals," said a Volkswagen Financial Services spokesperson.
Martin Lewis said the February hearing date was the later of two possible options and warned that affected drivers would have to wait longer for payments.
"The legal challenge to the FCA's car finance mass redress scheme will be heard in court 16-26 Feb. Sadly that's the later of the two date options, so even more delay. Firms must still deal with complaints under the scheme now, but payouts are on hold," said Martin Lewis.
"There is another way you can do this – go to court and you may get more," said Martin Lewis. He added that court awards could differ from the regulator's scheme and that legal fees could reduce any compensation recovered through claims firms or lawyers.
The Upper Tribunal hearing is scheduled for February 16 to February 26, 2027, with lenders and consumer representatives set to argue their challenges against the FCA scheme.
Originally published by Suara Garut on 13 October 2026.