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New VW and Mercedes 'Uncertainty' over £829 Payouts to Drivers

The financial services arms of Volkswagen, Mercedes-Benz, and Credit Agricole have launched legal challenges against the Financial Conduct Authority's industry-wide redress scheme, which is set to cost the industry about £9.1 billion.
These lawsuits follow the FCA setting final details in March for the compensation package, aiming to resolve a long-running motor finance saga that has left millions of consumers facing "fresh uncertainty" regarding potential payouts.
Consumer Voice argues the package will short-change drivers, while other major lenders including Lloyds, Barclays, Santander, Close Brothers, and the Finance and Leasing Association have decided not to challenge the scheme.
Defending the scheme, the FCA stated it will "defend the scheme robustly as lawful and the best way to resolve such a widespread, long-running and complex issue," noting £39 billion was borrowed in 2024.
Moving forward, the FCA plans to provide further advice to firms next week while engaging with lenders and consumer groups to determine next steps, including contingency planning, for the compensation process expected to settle by 2027.

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FCA faces four lawsuits over £9.1bn compensation scheme for car loan victims

Watchdog says legal challenges from Consumer Voice and three lenders ‘create fresh uncertainty for millions of consumers’ Business live – latest updates The UK financial watchdog is facing four legal challenges against its £9.1bn compensation scheme for victims of the motor finance scandal. The Financial Conduct Authority (FCA) said that it will defend the scheme [...]

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