Millions of drivers face delays to receive £829 as FCA suspends car finance compensation scheme

The Financial Conduct Authority has announced a partial suspension of the car finance redress scheme, which will leave drivers waiting even longer to receive compensation.

Legal challenges have been mounted against the FCA from four commercial parties, including Consumer Voice, represented by Courmacs Legal, Volkswagen Financial Services, Mercedes-Benz Financial Services, and Crédit Agricole Auto Finance.

The Upper Tribunal has ruled that it will hear the challenges to the motor finance scheme in December this year and February 2027, which will delay compensation for drivers.

It was confirmed last year that 12.1 million agreements are eligible for compensation, at a cost of £9.1billion, with the average agreement set to receive £829.

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The FCA originally planned for drivers to start receiving compensation later this year, with a target of early 2028 to have the majority of compensation payments made.

It stated: "The partial suspension enables firms to keep preparing for the scheme and progress complaints as far as possible, while avoiding work that may need to be repeated if the challenges succeed.

"It also provides certainty for some consumers sooner, by requiring firms to tell complainants who are not owed compensation, subject to limited exceptions."

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