Legal challenges to the FCA’s motor finance redress scheme will be heard over nine days from 16 February 2027, with compensation payments delayed until the Tribunal process concludes.
A nine-day Upper Tribunal hearing, scheduled for 16 to 26 February 2027, will decide the fate of the Financial Conduct Authority’s motor finance consumer redress scheme — a programme covering agreements taken out between 6 April 2007 and 1 November 2024. The FCA partially suspended the scheme on 2 July 2026 following a Tribunal order, meaning lenders currently have no obligation to calculate or pay redress, or send consumers any communications about compensation owed, under the suspended parts.
Four parties are challenging the scheme under section 404D of the Financial Services and Markets Act 2000: CA Auto Finance UK Limited, Consumer Voice Limited, Mercedes-Benz Financial Services UK Limited, and Volkswagen Financial Services (UK) Limited. The challenges are being heard by the Upper Tribunal’s Tax and Chancery Chamber.
The FCA says it will defend the scheme, describing it as the quickest, fairest and most efficient way to compensate affected consumers. Firms must still comply with scheme rules that have not been suspended.
The challengers’ positions differ between applicants — but the figures show an unusual split: some argue the scheme is excessively favourable to consumers, while others contend it favours lenders. If the scheme survives the Tribunal and any subsequent appeal, the FCA expects compensation payments to begin in 2027.
The February listing replaces an earlier procedural option of a five-day hearing starting 14 December 2026. For consumers who believe they were treated unfairly through motor finance commission arrangements, that shift means a longer wait before any redress calculations or payments can begin.
Key information
- Who is covered: consumers with motor finance agreements entered into between 6 April 2007 and 1 November 2024
- Current position: lenders do not have to calculate or pay redress under the suspended parts of the scheme while the legal challenge continues
- Hearing dates: 16 to 26 February 2027 at the Upper Tribunal, Tax and Chancery Chamber — subject to further procedural changes
- If the scheme is upheld: the FCA expects compensation payments to begin in 2027
Source: @TheFCA
Motor finance compensation hearings set for February 2027 Quiz
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