The Financial Conduct Authority said on 8 May 2026 that four applicants had asked the Upper Tribunal to quash parts of its motor finance compensation scheme, covering discretionary commission arrangements, high commission arrangements and tied arrangements.
The FCA said the applications contest its power to make the rules, its approach to identifying loss, the inclusion of agreements entered into before 1 April 2014, the application of limitation law, presumptions that an unfair relationship existed where relevant arrangements were not adequately disclosed and that any such unfair relationship caused consumer loss, the mechanics used to calculate redress, the application of its integrity objective, and alleged unlawful interference with lenders’ property rights under the Human Rights Act 1998.
In correspondence published by Parliament on 9 June, FCA Chief Executive Nikhil Rathi said the regulator would defend the scheme and identified the lender applicants as Volkswagen Financial Services UK, Mercedes-Benz Financial Services (UK) and Crédit Agricole Auto Finance, alongside a challenge by Consumer Voice.
The FCA’s final scheme, published in March, estimated total cost to firms at £9.1 billion, including £7.5 billion of redress, and said about 12.1 million agreements were eligible across two periods spanning 6 April 2007 to 1 November 2024. The regulator told firms to continue preparatory work, including identifying complaints and agreements, gathering data and submitting implementation plans, and external legal commentary cited by the FCA process indicated the case was unlikely to be heard before October 2026.