FCA: Motor finance legal challenge to be heard in February 2027

The summary above is from the announcement FCA published on October 18, 2026.

What the announcement says

The scheme was challenged by 3 lenders – Volkswagen Financial Services, Mercedes Benz Financial Services, and Crédit Agricole Auto Finance – and by Consumer Voice, represented by Courmacs Legal. The scheme is currently partially suspended. However, firms must keep preparing for the scheme and progress complaints as far as possible.Our scheme is the quickest, fairest and most efficient way to compensate consumers and we will defend it robustly.Advice for lenders Lenders must comply with the scheme rules that remain in force. This includes sending letters to some consumers not owed compensation under the scheme.Firms should plan for the possibility that, if the scheme or parts of it are quashed, there may be no motor finance compensation scheme and no complaint handling pause. In that scenario, lenders would need to be operationally and financially ready to resolve complaints through the usual complaint-handling process and within the usual statutory timescales.We expect lenders to plan rigorously for this scenario, make the necessary financial provisions and engage with their auditors.We encourage firms to contact us if they have questions. We will keep our firm web page updated with the latest information.

FCA

Supervisory announcements can change which entity is allowed to serve clients in a region, what investor protection applies to them, and which firms are under scrutiny.

Read the full announcement on FCA

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