Car finance redress scheme partially suspended: what drivers should do next
The FCA’s motor finance redress scheme has not been cancelled, but parts of it are temporarily paused. On 2 July 2026, the Upper Tribunal suspended parts of the FCA's motor finance redress scheme while four legal challenges are considered. The hearing is scheduled for either 14 to 18 December 2026 or 16 to 26 February 2027, depending on procedural decisions. A judgment is expected in the following months.
Until the legal process concludes, lenders do not have to calculate or pay compensation owed under the scheme. If the scheme is upheld and the judgment is not appealed, the FCA expects payments to begin in 2027. If it is overturned or changed, the FCA may require lenders to handle complaints individually or consult on a revised scheme, which could cause further delays. Our guide to why the payouts are paused explains the background.
What remains in force
The suspension is only partial. Lenders must continue identifying relevant complaints and agreements, gathering commission and disclosure information, cooperating with the Financial Ombudsman Service and progressing matters outside the suspended rules. They must also tell some complainants when no compensation is due, although exceptions and extended deadlines apply.
The scheme potentially covers finance used for a car, motorbike, van or campervan between 6 April 2007 and 1 November 2024. This includes PCP and other hire purchase agreements, but not Personal Contract Hire leases. An agreement is not automatically eligible merely because it falls within those dates. The scheme focuses on undisclosed discretionary commission arrangements, high commission arrangements and certain contractual ties, with exclusions for some business, high-value and previously resolved cases.
What drivers should do now
1. Check whether the agreement may qualify
Review the vehicle, finance type, dates and how the dealer or broker arranged the loan. How car finance mis-selling works explains the main issues, while our guide to hire purchase mis-selling covers agreements beyond PCP.
2. Submit a complaint if you have concerns
The FCA says the best step for someone who has not complained is to contact the lender directly. You can start a mis-sold car finance claim yourself for free. Making a complaint now creates a dated record, gives the lender your current contact details and ensures the agreement is considered. The car finance complaint process explains the information to include.
3. Continue making contractual payments
A complaint does not pause or cancel a live finance agreement. Missing payments could lead to arrears, additional charges, vehicle recovery action or adverse information on your credit file. Our guide to complaining and your credit file explains why repayments should continue unless the lender formally agrees another arrangement.
4. Avoid submitting duplicate complaints
If you have already complained, keep your contact details updated and retain the acknowledgement, agreement number and correspondence. Lenders are expected to update complainants about the legal challenge and its effect on the timetable. Sending repeated complaints is unlikely to accelerate the outcome.
5. Review any decision carefully
Some customers may receive a decision that they are outside the scheme or are not owed compensation. Ask the lender to review the outcome if information appears incorrect. Where the relevant complaint route is available, you can refer the matter to the Financial Ombudsman without paying an application fee.
Do you need to pay for help?
No. Complaining directly to the lender is free, and the FCA says consumers do not need a law firm or claims management company. A representative may be convenient, but it can deduct a fee from successful compensation. Read the agreement carefully, including cancellation terms and the total fee.
Claim First offers support on a no-win, no-fee basis, but a success fee is payable if compensation is recovered. A settled or ended agreement may still qualify if it otherwise falls within the scheme.
Watch out for scams
Scammers may impersonate lenders, claims companies or the FCA and offer fake compensation. Verify contact details through the lender’s official website or the FCA’s published lender list. Never transfer money to the FCA or disclose banking passwords or PINs. If money has already been lost, scam recovery support may be available.
Get help
Claim First can review relevant agreements and handle a complaint under its published terms. It also supports payday loan refunds and housing disrepair claims. Submit your information promptly, keep your records safe and be prepared for the timetable to remain uncertain until the legal challenge concludes.
