RE: File a complaint10 May 2026 16:13
Millions of UK consumers who bought a car on finance are now facing a significant delay to redress payments, after the Financial Conduct Authority (FCA) admitted legal challenges put the official free-to-access scheme in doubt.
In an update published on Friday 8 May, the regulator admitted there's a scenario in which there is “no scheme”, with consumers instead having to raise individual complaints, possibly through potentially costly court action.
While it couldn't put an exact timeline on the four legal challenges that could result in the scheme’s collapse, the FCA said more would be known by mid-November 2026, at which point lenders would be expected to handle complaints within normal statutory deadlines.
The FCA said: “Complaints cannot be paused indefinitely.”
The regulator added that if the compensation scheme or parts of it are struck down, it may need to consider a revised approach, which could itself face further legal challenges and delays.
When the Motor Finance Redress Scheme was revealed at the end of March, the FCA promised payouts averaging £829 per car that was bought on finance between 2007 and 2024.
The FCA still insists consumers should receive compensation where they lost out through unfair commission arrangements; and said it remains committed to an industry-wide scheme which it believes would deliver redress “as quickly as possible”.
However, four legal challenges have now been launched against the proposed scheme from three finance companies and one consumer group.
The FCA admitted that it's unclear when the legal case will even be heard, admitting that it's “unlikely to be before October”.