Car Finance Claims Update: Where the FCA Scheme Stands

What is the latest car finance claims update?

The latest update on car finance claims is that the scheme rules are in force but partly suspended, the hearing is fixed for 16 to 26 February 2027, and lenders are sending only "not owed" decisions.

Who is covered has not changed: agreements from 6 April 2007 to 1 November 2024 (PS26/3). Each needs a DCA, high commission (at least 39% of the charge for credit and 10% of the loan) or a tie that was not properly disclosed. The FCA expects all lenders to keep complainants up to date. The three lenders bringing challenges must write to each of their complainants to explain the challenge and the delay (FCA, 2 July 2026).

What happened at the 5 and 6 October hearing?

The Tribunal fixed the final hearing for 9 days from 16 February 2027, so the December 2026 window is no longer in use. The FCA announced the dates in a statement first published on 13 October 2026 and published the Tribunal's directions from the 5 and 6 October hearing. Paragraph 10 of the directions lists the final hearing "for 9 days commencing 16 February 2027 with an additional four days of judicial pre-reading".

The same directions decided the applications for evidence:

• Disclosure: the FCA must give further disclosure, including its loan-level dataset and its DCA commission model impact analyses, with the code behind its matching method.
• Expert evidence: CA Auto Finance and Volkswagen Financial Services may share one economics expert, Mercedes-Benz Financial Services may use its own, Consumer Voice may rely on four expert reports, and the FCA may reply with one economics expert.

The FCA says firms should plan for the possibility that the scheme, or parts of it, is quashed. In that case there may be no scheme and no complaint handling pause, and lenders would deal with complaints under the usual process and timescales (FCA, 13 October 2026). We do not predict the outcome.

The FCA publishes the Tribunal's orders on its legal challenge documents page. We add any new order here within one working day of its publication, with its date and source.

How did we get here?

The scheme reached this point through a ban on discretionary commission in 2021, two court rulings and FCA rules that are now under legal challenge.

What happens next for car finance claims?

Two letter dates and the hearing dates are now fixed for car finance claims. The table below sets out every date still to come, up to 31 August 2027.

When are the "not owed" letters due?

Lenders are due to tell complainants who are not owed anything under the scheme by 18 November 2026 or 18 January 2027, depending on when the agreement started.

• 18 November 2026: agreements from 1 April 2014, with a complaint made by 30 June 2026.
• 18 January 2027: agreements from before 1 April 2014, with a complaint made by 31 August 2026.
• Within 5 months of the complaint: complaints made after those dates.

Both dates fall 7 weeks after the scheme's original deadlines of 30 September and 30 November 2026. The FCA said it would take no action against a lender that writes within those 7 weeks (FCA, 2 July 2026; PS26/3). The dates do not apply where the lender says your complaint is out of time, or where it relies on the car maker tie exception, because both points are part of the legal challenge. The FCA also warns that silence by these dates does not necessarily mean compensation is due.

A "not owed" letter you think is wrong goes back to the lender first: ask it to review the decision. The Financial Ombudsman Service, which is free, is the next step, and a court claim is the other option. The steps are in How to claim mis-sold car finance yourself, for free.

When will the Tribunal hear the challenges?

The hearing runs over 9 days from 16 February 2027, after four days of pre-reading by the judges (directions order, October 2026). The four challengers are Consumer Voice (represented by Courmacs Legal), Volkswagen Financial Services, Mercedes-Benz Financial Services and CA Auto Finance. The three lenders need the Tribunal's permission to bring their challenges, and the Tribunal decides that at a "rolled-up" hearing alongside the challenges themselves (directions order, paragraph 2).

The FCA lists the grounds of challenge in its update of 8 May 2026. They include:

• whether the rules can reach agreements made before 1 April 2014;
• how the rules decide which complaints are out of time;
• the presumptions that the relationship was unfair and that you lost out;
• the 17% and 21% APR adjustments and the compensatory interest rate.

When will car finance claims be paid?

Not yet: no one is being paid under the scheme, and no payments can start before the judgment that follows the February 2027 hearing. Until the legal process concludes, lenders do not need to calculate or pay compensation under the scheme (FCA, 13 October 2026). Earlier, the FCA said payments could begin in 2027 only if the scheme is upheld and the judgment is not appealed.

The FCA told the Treasury Committee on 8 June 2026 that some firms were exploring whether they could make settlement offers on complaints that would otherwise go through the scheme. The scheme's own early offer rule (CONRED 5.2.7R) required any such offer to be no less than the most the rules would give. That rule is not on the Tribunal's list of rules kept in force. MoneySavingExpert reported on 6 October 2026 that it had not heard of any lender making an offer.

The FCA puts the average at £829 per agreement across about 12.1 million eligible agreements, and some get more, some less and some nothing. Your own amount depends on your agreement: How much compensation for mis-sold car finance will I get? explains how it is worked out.

What happens if the scheme is upheld or overturned?

The two outcomes lead to different routes to payment, and we do not predict which one the Tribunal chooses.

The FCA told the Treasury Committee on 8 June 2026 that a complaints-led approach would cost lenders over £6bn more and take three years to resolve claims. Its 2027 expectation depends on there being no appeal against the judgment.

How long does a mis-sold car finance claim take?

There is no fixed time yet: most mis-sold car finance claims wait for the Tribunal's judgment before any lender works out compensation. The scheme itself does not use the word "mis-sold": it asks whether commission was payable and an unfair arrangement was not properly disclosed. The original timetable gave lenders 3 months after the implementation period to tell complainants whether they were owed and how much, and the suspension stopped that clock (PS26/3; FCA, 2 July 2026). After a restart, the timed steps are short:

1. 1
   Your lender sends a provisional decision with the amount.
2. 2
   You have 1 month to accept or challenge it.
3. 3
   The lender pays within 1 month of your acceptance, and adds 8% a year simple interest for any delay after that (CONRED 5.4.38R and 5.4.39R).

Under the normal complaints process, a lender has 8 weeks to reply before you can take the complaint to the Financial Ombudsman Service (FCA, 2 July 2026).

What can you do while you wait?

You can complain, estimate your agreement and check who contacts you, all for free.

• Complain to your lender if you have not yet: the FCA calls it "the best thing you can do, if you have concerns". The FCA's list of lenders has the address and a template letter for each one.
• Estimate your agreement with the car finance claim calculator, which applies the FCA's published rules and shows every step.
• Check every letter, email and call against the FCA's list of lenders before you share any details.
• Use one representative at most: the FCA warns that signing up with more than one claims firm or law firm can mean more than one fee. Firms can take up to 36% of your compensation, including VAT, the FCA says. Car finance solicitors and claims companies explains what firms charge.
• Leave a firm you no longer want: you can end the agreement. The FCA says any exit fee must be reasonable and match the work done so far, with most claims still at an early stage. Complaints go to the firm first, then to the Claims Management Ombudsman for a claims company or the Legal Ombudsman for a law firm.

How we keep this page up to date

We check the FCA's statements, its legal challenge documents page and its car finance claims page every week until the February 2027 hearing. We also update the page within one working day of any new FCA statement or Tribunal order. After the hearing we check every two weeks until the judgment, then monthly.

We do not take dates from car finance news reports: every date on this page names the FCA statement, FCA Handbook rule or Tribunal order it comes from. The page covers the scheme as a whole, so for your lender's own update on a mis-sold car finance complaint, check its letters and its complaint page. The FCA also sends its own email updates on car finance complaints.

Change log

13 October 2026: Page published. Checked the FCA statement of 13 October 2026, which confirms the hearing for 16 to 26 February 2027, the Tribunal's directions from the 5 and 6 October 2026 hearing, the FCA statement of 2 July 2026 and the FCA's car finance claims page.

You can complain to your lender or use the FCA scheme for free.

Sources:

• FCA, legal challenge to be heard in February 2027, 13 October 2026
• Upper Tribunal directions, October 2026
• FCA, scheme partially suspended, 2 July 2026
• Upper Tribunal directions order, 1 July 2026
• Rules kept in force, 1 July 2026
• FCA, car finance claims
• PS26/3
• FCA letter to the Treasury Committee, 8 June 2026

Car Finance Claim Calculator is not the FCA, a claims company or a law firm.

Written and checked by Car Finance Claim Calculator. Spotted an error? Tell us on the contact page; the editorial policy explains how we check and correct figures.