{"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<p>The decision means lenders will not be required to calculate or pay <strong>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<p>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<p>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<h2 class=\"wp-block-heading\"><strong>Tribunal Timetable Puts Compensation on Hold<\/strong><\/h2>\n\n\n\n<p>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 <strong>compensation<\/strong>, make payments or contact consumers who may be entitled to redress under the proposed scheme.<\/p>\n\n\n\n<p>The FCA said the <strong>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<p>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 <a href=\"https:\/\/en.econostrum.info\/uk\/fca-ruling-drops-today-millions-700-payments\/\" data-type=\"post\" data-id=\"118735\">FCA <\/a>said it will need to determine its next steps. Should a revised scheme require<strong> further consultation<\/strong> and face additional legal challenges, compensation could be delayed until 2028 or beyond.<\/p>\n\n\n\n<p>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<figure class=\"wp-block-embed is-type-rich is-provider-x wp-block-embed-x\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">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.<br><br>The partial suspension enables\u2026 <a href=\"https:\/\/t.co\/ly3vMMxL0v\">pic.twitter.com\/ly3vMMxL0v<\/a><\/p>&mdash; Financial Conduct Authority (@TheFCA) <a href=\"https:\/\/x.com\/TheFCA\/status\/2072639496642773393?ref_src=twsrc%5Etfw\">July 2, 2026<\/a><\/blockquote><script async src=\"https:\/\/platform.x.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Consumers Advised to Complain Directly to Lenders<\/strong><\/h2>\n\n\n\n<p>The FCA continues to encourage anyone who believes they were treated unfairly under a motor finance agreement to submit a <strong>complaint <\/strong>directly to their lender rather than using a claims management company or law firm.<\/p>\n\n\n\n<p>According to the regulator, consumers who use claims firms could lose more than 30% of any compensation they eventually receive. It also warned that some firms may charge cancellation fees if customers decide to withdraw from agreements, although such fees must be reasonable and reflect the work carried out.<\/p>\n\n\n\n<p>The regulator has also confirmed the timetable for consumers who are found not to be eligible for compensation. Motorists whose agreements began on or after 1 April 2014 and who complained by 30 June 2026 should be informed by 18 November 2026 if they are not due compensation. Those with agreements beginning before 1 April 2014 who complained by 31 August 2026 should receive a decision by 18 January 2027.<\/p>\n\n\n\n<p>Commenting on the suspension, Consumer Voice co-founder <a href=\"https:\/\/uk.linkedin.com\/in\/alexlouiseneill\" target=\"_blank\" rel=\"noopener\">Alex Neill<\/a> said the organisation would present evidence arguing that the FCA&#8217;s proposed scheme does not provide fair or adequate redress for consumers. Meanwhile, Richard Pinch of consultancy Broadstone said the delay provides lenders with greater operational certainty while allowing them to continue identifying eligible cases and preparing for the tribunal&#8217;s decision.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Millions of motorists expecting compensation for mis-sold car finance agreements will have to wait longer after the Financial Conduct Authority (FCA) confirmed that key parts of its industry-wide redress scheme have been suspended following legal challenges.<\/p>\n","protected":false},"author":10,"featured_media":122515,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[44],"tags":[],"class_list":["post-122511","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33","no-featured-image-padding"],"_links":{"self":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts\/122511","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/comments?post=122511"}],"version-history":[{"count":2,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts\/122511\/revisions"}],"predecessor-version":[{"id":122514,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts\/122511\/revisions\/122514"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/media\/122515"}],"wp:attachment":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/media?parent=122511"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/categories?post=122511"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/tags?post=122511"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}