Millions of drivers expecting compensation from the car finance mis-selling scandal will now have to wait longer, as the Financial Conduct Authority (FCA) has suspended the £830 payout scheme until 2027. The delay comes amid ongoing legal challenges set to be heard in December or February next year, with a judgment expected several months thereafter.
Until the legal matters are resolved, lenders are not required to calculate or disburse compensation to those owed money under the current redress scheme. Should the scheme be upheld without further appeals, FCA anticipates the payouts will commence in 2027, despite previous plans to distribute around £829 to victims this summer.
Consumer advocate Martin Lewis, a star of BBC and ITV, highlighted the unprecedented scale of the redress scheme. He explained that it is a “mass redress scheme,” meaning firms must compensate everyone mis-sold car finance contracts between 2007 and 2024, not only those who have filed complaints.
READ MORE: Reform ‘Unsure’ if Fly-Tipping Enforcement Will Increase Across Walsall
READ MORE: Drone Surveillance Tackles Yobs and Car Cruisers at Merry Hill Centre
Lewis urged people to submit complaints proactively rather than waiting for lenders to track them down, as many lenders may no longer possess customers’ contact details due to data protection policies or lost records. Additionally, individuals who have changed their names or addresses since financing their vehicles may be hard to locate without a formal complaint.
To assist consumers, Lewis pointed to a free complaints tool available on MoneySavingExpert.com. The platform has already helped process 3.6 million complaints, guiding users through a simple process of inputting their details, generating an email, and sending it off without any charge.
In the meantime, drivers are encouraged to act promptly to ensure they are included in the compensation group and receive the amounts owed once the scheme resumes.