Drivers who were hoping for payouts averaging £829 this year are now stuck in limbo following a series of legal challenges.
Drivers left in limbo as FCA confirms delay to £829 car finance compensation
Drivers face being stuck in limbo as the Financial Conduct Authority confirms a major delay to car finance compensation. Drivers who were hoping for payouts averaging £829 this year are now stuck in limbo following a series of legal challenges.
The Financial Conduct Authority said its aim remains to ensure customers receive compensation quickly while preserving stability in the market, where £39 billion was borrowed in 2024.
Four challenges have been lodged. One comes from Consumer Voice, while lenders Volkswagen Financial Services, Mercedes Benz Financial Services and Credit Agricole Auto Finance have also taken action.
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The Financial Conduct Authority (or FCA) has admitted it is now “unlikely” that the legal battle will even be heard in court before October.
The FCA said elsewhere in a statement: “Many people will be frustrated that the legal action will delay payouts due to begin this year.” The watchdog added that it acknowledges the “frustration of consumers, many of whom have waited over two years for an answer.”
These motorists may have been overcharged due to “discretionary commission arrangements” where dealers hiked interest rates to pocket bigger kickbacks.
Despite the courtroom drama, the FCA insists its industry-wide plan is the “quickest, fairest and most cost-effective way” to fix the mess.
The regulator stated: “Our industry-wide scheme is the quickest, fairest and most cost-effective way to do this.
“As we have said, we welcome the commitment of most lenders to implement the scheme and will defend it robustly.”
The FCA said in another update: “The best step, if you have concerns, is to complain directly to your lender – this is free, and our website explains how to do it and the contact details for lenders.
“You do not need a law firm or claims management company, which may charge over 30% of any compensation.”