Key facts
- Consumer Voice is preparing to challenge the FCA's £9.1 billion car finance redress scheme in the High Court.
- The consumer group argues the scheme's calculation method will under-compensate millions of drivers.
- Consumer Voice claims the scheme could leave drivers hundreds of pounds out of pocket per claim.
- The FCA's scheme is intended to compensate for mis-sold car finance agreements between 2007 and 2024.
- The total payout is estimated at £7.5 billion to borrowers, with £1.6 billion for administrative costs.
- The FCA expects millions of claims to be paid out this year, with most settled by the end of 2027.
A consumer group is preparing to take the UK's Financial Conduct Authority (FCA) to court over its £9.1 billion car finance redress scheme. Consumer Voice argues that the scheme, designed to compensate millions of drivers for mis-sold car finance agreements between 2007 and 2024, will significantly under-compensate victims. The group plans to apply to the upper tribunal for a judicial review, asserting that the FCA's calculation method is flawed and unfairly caps compensatory interest, potentially leaving consumers hundreds of pounds out of pocket per claim. The FCA, however, maintains that its scheme is the quickest and fairest way to compensate consumers and that the challenge could delay payouts. The scheme estimates a total payout of £7.5 billion to borrowers, with an average of £830 per mis-sold loan, covering approximately 12.1 million eligible agreements. The FCA expects most claims to be settled by the end of 2027.