Parts of the FCA’s motor finance compensation scheme are currently suspended pending the outcome of a legal challenge.
Three Motor Finance lenders, Volkswagen , Mercedes and CA Auto Finance are challenging the FCA’s motor finance redress scheme via a Judicial Review hearing in the courts.
A hearing will take place in December 2026 or February 2027. Because of this development, there will be a delay in resolving customer complaints. The FCA has said we should continue preparing for some elements of the proposed scheme, but that the scheme timetable may need to change while the legal challenges are ongoing.
At the moment, there are several possible outcomes detailed below:
The legal challenges aren’t successful, and the original scheme goes ahead as planned. The FCA has said customers shouldn’t expect any redress payments before 2027.
The courts decide that some or all of the original scheme needs further review. The FCA will decide what happens next. If that happens, the FCA could:
Introduce a revised redress scheme. If this happens, the FCA has said customers aren’t likely to receive payments before the second half of 2027 and perhaps not until early 2028;
or move to a no scheme complaints-led approach.
We will continue to post further updates once more information becomes available from the FCA.
What this means for you
If you have already made a complaint to Redline Finance Services, you do not need to take any action at this time.