The Upper Tribunal has ordered a partial UK Auto Finance Tribunal pause, suspending parts of the compensation scheme for the UK’s motor finance scandal while legal challenges proceed. The Financial Conduct Authority said firms do not have to calculate or pay redress until that process ends.
The pause leaves complaints work partly active and partly on hold. Firms must still identify relevant complaints and agreements, and they must still gather the data needed to identify commission arrangements, even as compensation communications and redress calculations stop.
The Upper Tribunal order
The hearing on the legal challenges will take place either on 14 to 18 December 2026 or 16 to 26 February 2027. The four challenges are being brought by Consumer Voice, Volkswagen Financial Services, Mercedes Benz Financial Services, and Crédit Agricole Auto Finance.
Before the pause, the Financial Conduct Authority had been expected to hand aggrieved borrowers £830 on average for each mis-sold loan. The scheme covers drivers overcharged for loans as a result of commission payments between lenders and car dealers between 2007 and 2024.
What firms must still do
The order does not stop every part of the work. Firms are still required to identify complaints that fall within the scheme and collect the data needed to work out which commission arrangements were used, but they are not required to move ahead with redress calculations or compensation communications yet.
That split leaves borrowers in a waiting period while the legal challenges run through the Upper Tribunal. The compensation work can restart only after the tribunal process concludes, and the judgment is expected in the months after the hearing.
