Car finance compensation: FCA challenge goes to trial in February
Consumer Voice is challenging the FCA’s payout calculations, which we believe could leave millions of drivers short-changed.
The legal challenges to the Financial Conduct Authority’s (FCA) car finance compensation scheme will go to trial on 16 February 2027, following a two-day hearing at the Upper Tribunal on 5 and 6 October.
The trial is scheduled to last nine days, with four additional days set aside for the judges to read the case papers.
At the hearing, the Tribunal considered which expert evidence to allow, what further documents the FCA should release and when the trial should take place. It has now agreed to consider evidence from both Consumer Voice’s economic experts and ordered the FCA to provide more of the data and analysis behind its payout calculations.
We support a nationwide scheme to get money back to millions of drivers. But we believe the FCA’s payout rules could leave people with less than they are fairly owed. Three lenders are also challenging the scheme, but Consumer Voice is the only applicant arguing that drivers could receive too little compensation.
Alex Neill, co-founder of Consumer Voice, said:
“We remain resolute and confident in our challenge, the only one made on behalf of millions of consumers who are being short-changed by the redress scheme. Now the February trial date has been fixed, the FCA and the lenders must not be allowed to delay it further. We want to get on with the case.”
Read more about why Consumer Voice is calling for fairer car finance payments. Sign up to Consumer Voice for updates on your rights, your money and ways to get back what you’re owed.
What the FCA told lenders about car finance payments
The hearing also raised questions about discussions between senior FCA officials and lenders while the compensation scheme was being developed.
In notes of a November 2025 meeting with CA Autobank, FCA chief executive Nikhil Rathi is recorded as describing the proposed scheme as the “cheapest and most efficient way to bring closure”. We believe these discussions raise important questions about how the FCA balanced the cost to lenders against fair compensation for consumers.
We also asked to see an economic report commissioned by lenders that the FCA considered, along with communications between the regulator and HM Treasury about the scheme design.
The Tribunal has not ordered disclosure of those documents. It has, however, ordered the FCA to provide more detailed loan-level data, other datasets and analysis of commission arrangements, including the computer code behind part of its methodology.
Do the FCA’s compensation figures add up?
The FCA’s scheme uses standard calculations to work out compensation for millions of car finance agreements. But those calculations depend on data and assumptions about how much people lost.
Our expert evidence challenges parts of that approach, including the reliability of the data and whether the FCA’s calculations properly reflect losses across different lenders and different years. Our experts examine the FCA’s calculations and whether a more generous scheme could have been introduced without damaging the car finance market.
At the hearing, the FCA’s lawyers argued that the regulator could have designed a scheme making “even less effort” to identify consumers’ financial losses. They also confirmed that the FCA does not dispute that the car finance market could withstand a more generous compensation scheme.
The FCA says it had to balance several competing priorities when designing the scheme, rather than simply pay as much as lenders could afford. We believe it gave too much weight to limiting the cost to lenders, at the expense of fair compensation for drivers.
We were ready for a December hearing
Consumer Voice reviewed the FCA’s data during the consultation on the scheme and submitted its main expert evidence when we brought our challenge in April. Our lawyers told the Tribunal that, had our case been heard on its own, our expert evidence would not have caused any material delay and the trial could have gone ahead in December.
The Tribunal has also given the lenders permission to bring expert evidence. Volkswagen and CA Auto Finance can use one shared economics expert, while Mercedes-Benz can bring its own. The FCA has permission to appoint an expert to respond.
The FCA pointed to the lenders’ requests for more data and expert evidence as the reason the trial could not go ahead in December. Consumer Voice and the lenders, meanwhile, raised concerns about how the FCA had handled disclosure.
The parties must now agree a timetable for the additional expert evidence and disclosure. Every further delay leaves people waiting longer for money they may be owed, while lenders continue to hold on to it. With the February trial date now confirmed, the priority must be to keep the case on track.
The FCA has also said that, if its scheme is overturned, it may decide against introducing a replacement scheme and instead require lenders to handle compensation complaints individually. We believe the regulator should fix the flaws and deliver a nationwide scheme that gives drivers the fair compensation they are owed.
Watch our video to find out what we think is wrong with the payment rules and what’s at stake for drivers.
Sign up to Consumer Voice for updates on the car finance challenge, other major compensation claims and your consumer rights.
