Car finance redress delayed as Upper Tribunal sets hearing for December or February
The FCA's £7.5bn motor finance redress scheme is partly suspended pending a legal challenge. Payouts are now unlikely before 2027
The FCA's motor finance redress scheme is on hold for most consumers. A legal challenge has partially suspended the scheme, and the Upper Tribunal will hear the case in December 2026 or February 2027, with a ruling expected months after that. Payouts are now unlikely before 2027. Lenders do not yet have to calculate or pay redress, but they must still log every complaint. Complaining now, directly and for free, keeps your place in the queue.
What the scheme covers
The scheme is aimed at car, van and motorbike finance agreements where the dealer or broker received a commission from the lender and the customer was not properly told. It applies to agreements signed between 6 April 2007 and 1 November 2024. The FCA expects total compensation of around £7.5bn, spread across millions of agreements, so individual payouts are likely to be modest for most people.
Lenders were expected to start assessing agreements and paying out this year. The legal challenge has stopped that clock. The FCA rules remain in place, but the parts requiring lenders to calculate and pay redress are suspended until the tribunal decides.
What lenders still have to do
They must accept and record complaints. If you complain now, your complaint is logged and will be assessed under whatever rules survive the tribunal. You do not need to wait for the hearing, and you do not need a solicitor or claims firm to do it.
Write to the lender, not the dealer. If you are not sure who the lender was, check your old paperwork or your credit report, which lists finance agreements. Ask whether a commission was paid and whether you were told about it.
What it means for you
If you had car finance between 2007 and 2024, complain to the lender now. It costs nothing and takes ten minutes. There is a template on the Financial Ombudsman and FCA websites.
Ignore texts, adverts and cold calls from claims firms promising fast payouts. They cannot speed the process up and typically take 20% to 40% of anything you receive. The lender will pay you directly if redress is due.
Do not expect money this year. The realistic timeline is a tribunal ruling in 2027 followed by lenders working through millions of cases. Treat any payout as a bonus, not a plan.