UK Tribunal Suspends Parts of the FCA's Motor Finance Redress Scheme

The UK's Upper Tribunal has suspended parts of the Financial Conduct Authority's motor finance consumer redress scheme, on terms the regulator agreed with four firms challenging it, the FCA confirmed. Firms must continue to comply with all rules that have not been suspended. The scheme, finalised earlier in 2026, is designed to compensate motor finance customers who were treated unfairly in relation to commission arrangements on car loans, and the FCA has said it is intended to return around £7.5 billion to consumers, with millions of claims settled by the end of 2027. The regulator has framed the industry-wide, free-to-use approach as the most efficient way to compensate consumers while giving firms certainty and supporting the continued availability of competitively priced motor finance. The partial suspension introduces fresh uncertainty into one of the largest consumer redress exercises in recent UK history, and its ultimate scope will depend on the outcome of the legal challenge. The FCA said it would provide further information to firms as the position develops, while urging affected businesses to keep complying with the rules that remain active.