{"id":122511,"date":"2026-07-03T08:00:00","date_gmt":"2026-07-03T07:00:00","guid":{"rendered":"https:\/\/en.econostrum.info\/uk\/?p=122511"},"modified":"2026-07-03T00:51:45","modified_gmt":"2026-07-02T23:51:45","slug":"fca-suspends-key-parts-of-9-1bn-compensation","status":"publish","type":"post","link":"https:\/\/en.econostrum.info\/uk\/fca-suspends-key-parts-of-9-1bn-compensation\/","title":{"rendered":"FCA Suspends Key Parts of \u00a39.1bn Compensation Scheme, Leaving Millions of Motorists in Limbo"},"content":{"rendered":"\n

The decision means lenders will not be required to calculate or pay compensation <\/strong>until the legal process has concluded. According to the FCA, payments are now expected to begin in 2027 if the scheme is upheld and any subsequent judgment is not appealed.<\/p>\n\n\n\n

The delay affects consumers whose motor finance agreements fall within the proposed compensation scheme covering arrangements made between 2007 and 2024. The regulator had previously estimated that around 12.1 million agreements could qualify for redress at a total cost of \u00a39.1 billion, with average compensation of \u00a3829 per agreement.<\/p>\n\n\n\n

The suspension follows a ruling by the Upper Tribunal, which will hear legal challenges brought by Consumer Voice, Volkswagen Financial Services, Mercedes-Benz Financial Services and Cr\u00e9dit Agricole Auto Finance later this year or early next year.<\/p>\n\n\n\n

Tribunal Timetable Puts Compensation on Hold<\/strong><\/h2>\n\n\n\n

According to reports, the Upper Tribunal is expected to hear the challenges either in December 2026 or February 2027. Until those proceedings have concluded, lenders do not have to calculate compensation<\/strong>, make payments or contact consumers who may be entitled to redress under the proposed scheme.<\/p>\n\n\n\n

The FCA said the partial suspension <\/strong>allows firms to continue preparing for the scheme while avoiding work that could have to be repeated if the legal challenges succeed. Firms will still be required to progress complaints as far as possible and notify complainants who are not entitled to compensation, subject to limited exceptions.<\/p>\n\n\n\n

The regulator also confirmed that, if the scheme is upheld and the judgment is not appealed, compensation payments are expected to begin during 2027. If the tribunal overturns all or part of the scheme, the FCA <\/a>said it will need to determine its next steps. Should a revised scheme require further consultation<\/strong> and face additional legal challenges, compensation could be delayed until 2028 or beyond.<\/p>\n\n\n\n

According to the FCA, one alternative would be to require lenders to resolve complaints individually through the existing complaints process. Under that route, firms would have eight weeks to respond, after which consumers could refer their case to the Financial Ombudsman Service if they remained dissatisfied.<\/p>\n\n\n\n

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The legal challenges to our motor finance scheme will be heard by The Upper Tribunal on 14-18 December 2026 or 16-26 February 2027. The Tribunal has also made an order suspending parts of the scheme on terms agreed by us with the 4 challengers.

The partial suspension enables\u2026 pic.twitter.com\/ly3vMMxL0v<\/a><\/p>— Financial Conduct Authority (@TheFCA) July 2, 2026<\/a><\/blockquote>