Millions of drivers could face delays to compensation payouts from a legal challenge.
This follows the Financial Conduct Authority (FCA)’s £7 billion redress scheme for mis-sold car finance, which car manufacturers Mercedes-Benz and Volkswagen are disputing.
The scheme aims to compensate drivers who were mis-sold vehicle finance agreements.
A Supreme Court ruling in August 2025 found that hidden commission payments to dealers created “unfair relationships” under the law.
A national law firm, HD Law, successfully argued that consumers were pushed into financial deals that were not in their best interest due to these undisclosed payments.
Kevin Durkin, solicitor and director at HD Law, said: “This scheme was flawed and unbalanced from a consumer perspective from the off, so it is only fair and right that is now challenged and scrutinised in the courts.
“In the short term, drivers could face more delays to payouts — but if the Consumer Voice challenge succeeds, compensation levels may rise substantially.
“However, it beggars belief that the lenders — who have been favoured with a watered-down compensation scheme — are now pushing the courts for even more concessions.
“In my opinion, it appears FCA has bent over backwards to keep the banks happy and onside, at every touch and turn.”
Mr Durkin added: “In 2025, Volkswagen made £277 billion in car sales and Mercedes generated £112 billion in revenue — yet they are apparently unhappy with the reduced burden on them and want to challenge the FCA scheme.
“It smacks of greed.”
Consumer Voice, a campaign group, has criticised the proposed average payout of £829 per finance agreement as too low and warned that limitations on eligibility and interest payments could further reduce what consumers actually receive.
Mercedes-Benz confirmed it is challenging the scheme and has said: “Mercedes-Benz Group can confirm that it has appealed against the FCA’s proposed Redress Scheme.
“Given that this is subject to ongoing legal proceedings, we cannot comment further.”
Other lenders, including Santander, Barclays, and Lloyds Banking Group, have accepted the FCA’s amended compensation plan, while Volkswagen has not confirmed whether it is appealing.
The FCA has defended its redress scheme as the “quickest, fairest way” to deliver compensation, but said that legal challenges could push back payments to millions of affected consumers.
Originally published by the Lancashire Telegraph on 4 May 2026.