Car Finance Payouts Were a 2026 Promise. The Tribunal Calendar Now Reads 2027.
When the Financial Conduct Authority signed off its car finance redress scheme in March, it put a date on the money as well as a number. “Millions of car finance customers to get payouts this year,” the press release said. That date has now gone. The Upper Tribunal has listed the challenge to the scheme for 14 to 18 December 2026, with a longer fallback window of 16 to 26 February 2027, and payments cannot begin until it has ruled. The £7.5bn the regulator promised this year is, on the tribunal’s own calendar, a 2027 event at the earliest.
The listing is the first firm date in a dispute that had, until now, only a suspension and no timetable. On 2 July the tribunal froze the parts of the scheme that move money: firms are not required to calculate redress, pay it, or write to customers telling them what they are owed. What was missing was any sense of how long that freeze would last. The hearing windows supply the answer. Even the earlier of the two, a December sitting, leaves no room for the FCA to run its calculate-and-pay machinery before the year turns. The later window pushes a substantive ruling into the spring, and any redesign or appeal after that would carry the money into 2028.
The number that is settled
The sum itself is not in doubt, and it is worth restating because it is the thing now stuck in limbo. The FCA’s PS26/3 fixes redress at £7.5bn, drawn from a wider sector bill of £9.1bn, spread across 12.1 million agreements written between April 2007 and November 2024. It is the largest consumer-redress exercise the regulator has run since PPI. The worked average lands near £830 an agreement, though most borrowers do not recover their commission in full: the scheme pays a hybrid figure blending the commission the lender paid the dealer with an estimate of the borrower’s actual loss, plus interest, modelled against a discounted APR.
Only the sharpest cases get everything back. Around 90,000 consumers whose facts track the Supreme Court’s decision in Johnson v FirstRand recover the full commission with interest. That judgment, handed down on 1 August 2025, is the scheme’s legal spine: the court narrowed the Court of Appeal’s sweeping commission ruling but upheld Johnson on unfair-relationship grounds under section 140A of the Consumer Credit Act. The FCA built the redress model to that shape and assumed 75% of eligible consumers would take part to reach its total.
A more expensive limbo than it looks
The suspension is partial by design. What is on hold is the disbursement. What continues is the preparation: firms must still identify relevant complaints and agreements, gather the commission data needed to work out who was affected, respond to complainants who turn out to be owed nothing, keep brokers updated, and cooperate with the Financial Ombudsman Service. The machinery keeps turning. It just does not pay.
For lenders, that is the awkward part of the delay. Provisions against the £9.1bn sector figure are already booked, so the cost is recognised on balance sheets that now have to carry it for another accounting year without resolution. The operational bill for running identification and data-gathering without a payout date is real, and it accrues whether or not the scheme is ultimately upheld. The FCA’s argument is that its route remains cheaper for the industry than the alternative, which it estimates would cost the sector more than £6bn on top through the Ombudsman and the courts. That case only pays off once the scheme is allowed to run, and the tribunal has just added the better part of a year to the wait.
Attacked from both flanks
The unusual feature of the challenge is that the regulator is being squeezed from opposite directions at once. The 2 July suspension was agreed with four parties: Consumer Voice, represented by Courmacs Legal; Volkswagen Financial Services; Mercedes-Benz Financial Services; and Crédit Agricole Auto Finance.
Consumer Voice’s complaint is that the scheme is too mean, that the hybrid remedy and the interest calculation understate the harm, and that the FCA trimmed redress to protect lenders. The three finance houses are litigating from the other side, contesting the basis and reach of a scheme that reprices commission arrangements retrospectively across more than a decade of lending. A regulator told simultaneously that it has been too generous and too stingy has either found the defensible middle or built something the middle cannot hold. That is precisely the question the December or February hearing exists to answer.
What the dates mean now
The FCA’s public line has not moved: its scheme is, it says, “the quickest, fairest and most efficient way to compensate consumers and we will defend it robustly.” It may be proved right. But the honest answer to the question every affected motorist is asking, whether the money is actually coming, is now bounded by a court calendar rather than a regulatory one. If the scheme is upheld in December and no one appeals, payments begin in 2027, a year later than the March headline. If the parties push to the February window, or if the tribunal strikes down a material part and forces a redesign, the money slips further still. The number was settled in March. When it is paid, and whether it survives intact, is a matter for a hearing that will not sit until the back end of the year.
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