City watchdog faces legal action over £9.1bn compensation scheme for car loan victims

Exclusive: Lawyers for group Consumer Voice notified FCA they are challenging redress scheme as inadequate A consumer group is preparing to take the City watchdog to court in the hope of overhauling a £9.1bn compensation scheme that it claims massively shortchanges victims of the UK car loan scandal. Lawyers working for Consumer Voice have written to the Financial Conduct Authority (FCA), notifying them that they intend to challenge the redress programme in order to protect drivers’ interests, according to sources familiar with the group’s plans. It will dash the regulator’s hopes of drawing a line under the motor finance scandal, in which drivers were overcharged for loans as a result of commission payments between lenders and car dealers between 2007 and 2024. The challenge would mean hauling the FCA to the upper tribunal, where a judge would be asked to review the merits of the long-awaited compensation programme. That could end up delaying payouts to drivers, which were widely expected to begin as early as this summer. An FCA spokesperson said in a statement: “Our scheme is the quickest, fairest way to compensate consumers. It seems contradictory that organisations cla