Millions of drivers face delays to receive £829 as FCA suspends car finance compensation scheme

The Financial Conduct Authority has announced a partial suspension of the car finance redress scheme, which will leave drivers waiting even longer to receive compensation.Legal challenges have been mounted against the FCA from four commercial parties, including Consumer Voice, represented by Courmacs Legal, Volkswagen Financial Services, Mercedes-Benz Financial Services, and Crédit Agricole Auto Finance.The Upper Tribunal has ruled that it will hear the challenges to the motor finance scheme in December this year and February 2027, which will delay compensation for drivers.It was confirmed last year that 12.1 million agreements are eligible for compensation, at a cost of £9.1billion, with the average agreement set to receive £829. TRENDING Stories Videos Your Say The FCA originally planned for drivers to start receiving compensation later this year, with a target of early 2028 to have the majority of compensation payments made.The final dates will depend on whether those involved in the case apply for further expert opinion or disclosure of information.A judgement is expected in the following months after the challenge, which will take place either in December or February next year.Until the legal process concludes, lenders do not need to pay compensation to people owed money under the terms outlined in the scheme, with the FCA expecting payments to begin again in 2027 if the scheme is upheld.It stated: The partial suspension enables firms to keep preparing for the scheme and progress complaints as far as possible, while avoiding work that may need to be repeated if the challenges succeed.It also provides certainty for some consumers sooner, by requiring firms to tell complainants who are not owed compensation, subject to limited exceptions.However, the UK's regulator warned that it will need to decide what to do next if the scheme is overturned in whole or in part.In the event that the FCA seeks views on a revised scheme which could face further legal challenges, compensation may be delayed until 2028 and beyond.LATEST DEVELOPMENTSLondon council begins seizing electric bikes causing 'significant obstruction' on streetsMotability changes set to slap thousands of drivers with £1billion VAT and insurance costPetrol and diesel drivers secure huge victory as fuel stations introduce 'widespread price reductions'MORE TO FOLLOW... Our Standards: The GB News Editorial Charter