UK FCA confirms motor finance legal challenge to be heard in February 2027

The UK Financial Conduct Authority (FCA) has published a statement confirming that the Upper Tribunal will hear legal challenges to its motor finance redress scheme from 16 to 26 February 2027. While the scheme remains partially suspended pending the outcome of the litigation (meaning firms are not currently required to calculate or pay compensation), the FCA reiterates that lenders must continue to prepare for the scheme and progress complaints as far as possible. The statement provides advice for both lenders and consumers.

The FCA advises that lenders must continue to comply with the rules that remain in force, including by sending letters to consumers who are not owed compensation under the scheme. Lenders should also plan for a range of potential outcomes, including the possibility that, if the scheme or parts of it are quashed, there may be no motor finance redress scheme and no complaint handling pause. In that scenario, lenders would need to be operationally and financially ready to resolve complaints through the usual complaint-handling process and within the usual statutory timescales. The FCA expects lenders to plan rigorously for this possibility, make the necessary financial provisions and engage with their auditors. Firms that have questions are requested to contact the FCA.

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