On 13 October 2026 the Financial Conduct Authority confirmed that the Upper Tribunal will hear the legal challenges to its motor finance Consumer Redress Scheme between 16 and 26 February 2027. The Tribunal had offered two windows, 14 to 18 December 2026 or 16 to 26 February 2027, and the later one has been fixed.

Who is challenging the scheme

Four parties lodged challenges in May 2026: three lenders, Volkswagen Financial Services, Mercedes-Benz Financial Services and Crédit Agricole Auto Finance, and the consumer group Consumer Voice, represented by the claimant firm Courmacs Legal. The lenders argue the FCA does not have the power to make the rules at all. Consumer Voice argues the FCA's compensation method may leave some consumers with less than they are owed.

What is suspended and what is not

Since the Upper Tribunal's order of 2 July 2026, parts of the scheme have been suspended on terms agreed between the FCA and the challengers. In practice, lenders do not have to calculate, communicate or pay compensation on the original timetable until the legal process ends. Everything else stands. The FCA has told lenders to keep preparing for the scheme, keep progressing complaints as far as they can, tell complainants who are not entitled to compensation, and plan for the alternative scenario in which the Tribunal quashes some or all of the rules.

What the FCA says about payments

The FCA's consumer guidance, updated on 13 October 2026, says that if the scheme is upheld and the judgment is not appealed, it expects payments to begin in 2027. A judgment is expected in the months after the February hearing. Any appeal would add further time. On that basis, we think the realistic earliest window for the first compensation payments is the second half of 2027, and later if there is an appeal.

Dates the FCA has given lenders

The FCA's guidance also sets out when it expects lenders to contact existing complainants to confirm their position, even though no compensation is being calculated:

  • If your agreement began on or after 1 April 2014 and you complained by 30 June 2026, your lender should contact you by 18 November 2026.
  • If your agreement began before 1 April 2014 and you complained by 31 August 2026, your lender should contact you by 18 January 2027.
  • If you complain after those dates, your lender should respond within five months.

What this means for your claim

Nothing changes in terms of what you need to do. If you have registered a claim with us, your case remains active and we are monitoring your lender's response. If you have not yet checked your eligibility, you can still complain to your lender at any time, free of charge, or ask us to trace your agreements and check them for you. The FCA has warned that fraudsters are posing as car finance lenders offering compensation. Do not share bank details with anyone you cannot verify.

We will write to clients as soon as the Tribunal judgment is handed down or there is a material development that affects their case.