The Financial Conduct Authority (FCA) has suspended its planned £830 compensation scheme for victims of the car finance mis-selling scandal, meaning millions of drivers will not receive payouts until at least 2027. The watchdog had previously aimed to deliver payments this summer, but legal challenges have forced a delay.
Legal Challenges Delay Payments
Legal challenges to the motor finance scheme are scheduled to be heard in December or February next year, with a judgement expected in the following months. Until the legal process is complete, lenders are not required to calculate or pay compensation to those owed money under the scheme. If the scheme is upheld and the judgement is not appealed, the FCA expects payments to begin in 2027.
Martin Lewis Advises Consumers
BBC and ITV star Martin Lewis has urged affected consumers to take action. He said: "Now, what's really important to understand is this is a mass redress scheme. In other words, not only will firms have to give compensation to the people who were mis-sold who've complained, they will have to try and identify everybody who was mis-sold between 2007 and 2024, contact them and pay them their money back, hence the mass scheme."
Lewis warned that consumers who have not yet complained may be harder to track down: "The lender may no longer have your details. They did destroy some, they're supposed to, data protection, so you will be far better off. And there is an easy way for you to find your details now, even if you don't have them, if you've got your details and you send in a complaint with them."
How to Complain
Lewis recommended using a free tool on his website MoneySavingExpert.com to submit a complaint. He explained: "You don't need to pay anyone. I have a totally free tool on my website. Just search 'MoneySavingExpert' and 'Car Finance' and there should be a picture of me at the top somewhere, which will show you that it's that." He added that 3.6 million complaints have already been processed through the tool.
The mass redress scheme is unprecedented in its scope, requiring lenders to identify all individuals who were mis-sold car finance between 2007 and 2024, contact them, and provide compensation. Consumers who have already complained will be prioritised, while those who have not are urged to do so to ensure they are included.
