Regulator's car finance redress scheme faces legal challenge to increase payouts – it may delay things so Martin Lewis says still get your complaint in ASAP

The most important thing is don't let this put you off putting a complaint in. If you had PCP or HP motor vehicle finance from April 2007 to November 2024, putting a complaint in likely means an easy and quicker payout, and you don't need to pay anyone to do it – just use the free DIY tool.

As I've said many times before, there is little doubt the regulator's motor finance redress amounts are likely a compromise in order to get its scheme out with a lower risk of challenge from the industry. So there is a level of irony that the first reported challenge is from a claims law firm looking to push payments up.

And indeed, it's also pretty clear the level of the payouts are lower than the amount those who go to court would hope to be awarded, though of course then, most people would have to give often 30% of any award to the claims firm that did the court process – whereas you can DIY the mass redress scheme for free. So there is a balance.

I think it is fair to say there's an element of a gamble by Consumer Voice in bringing this case, as while not its intention, there is a concern that it may risk delaying payouts, and many people already feel they have waited too long. The upside though is the chance of increasing the amount. If it wins, I think eventually the public will be supportive, yet if it delays the process and nowt comes of it, I suspect there will be real frustration that it chose this intervention.

I've done quick social media polls on this, and while not statistically representative, as I write with 5,000 votes in (across Facebook, X ,and Threads) it's stacked at: of those claiming, 52% see this as bad news because of the potential delay, 48% good news due to the chance of more money.

I have always supported a mass redress scheme, because it does not just rely on people complaining, but forces motor vehicle finance firms to actively seek out those who may have been mis-sold and contact them. Too many past mis-selling cases have been the preserve only of those who had the energy, knowledge and education to complain – which feels like it compounds the rip-off for those who miss out because they are not sure what to do, or are scared, or unaware.

Part of the appeal of mass redress is that it is meant to be easy and quick. Yet as it seems this case is happening, I can only hope it succeeds in getting more for consumers, and that, with hindsight, this turns out to be something we can celebrate.

Car Finance Mis-selling News – delays likely. The deadline for challenges to the FCA's planned mass redress scheme has now closed. In the end, the only challenge to it isn't from the car finance industry, it's from an organisation called Consumer Voice.

Consumer Voice says it "makes money by providing consumer-friendly communications and engagement services to law firms to help raise awareness of claims. In some cases, we take a fee from legal firms when someone from our community joins a claim." Its legal challenge will be run for it 'pro bono' by claims law firm Courmacs. It argues the redress calculation isn't generous enough and payouts should be higher.

I've long said the payout proposed is probably lower than you may get in Court (though then most'd likely have to pay claim firm fees). My guess is the reason the FCA has done this, ironically, was to avoid car finance firm legal challenges.

Yet even though the hope is bigger payouts, I have some concerns about this for consumers… The most potent is about how much longer this could all take. While Consumer Voice said it hoped there won't be a delay, the FCA has already said this challenge "will delay consumers getting compensation". The big question is for how long?

I'm no lawyer, so take this with a pinch of salt, but my rough mullings are…

• It wins the claim at Court. In that case, hopefully payouts will increase, though whether it's by a small technical amount or a substantial amount will be for the Court to decide. Yet, even then, the case could be appealed by the motor finance industry. Plus, depending on the result, it's possible the FCA may need to do a short consultation first.
  
  Overall, I suspect there is a potential of this delaying payouts by many months or at the outside a year. A source suggested to me at the very extreme there is also a risk the FCA loses and feels it can't go ahead with the Mass Redress scheme, leaving most people to either do their own individual claims (to firms and/or the Ombudsman) or go to Court. That'd be tragic as all the 'non claimers', including many vulnerable people, would miss out.
  
  

• It loses the claim in Court. This will all have been incredibly frustrating as payouts will have been delayed with no gain for consumers. There is of course the chance it may decide to appeal if it loses, adding more time.

All in all, I do see this as a gamble taken for millions of people by a relatively small company. We can only hope it pays off, with the David v Goliath victory of a quick win and no further appeals, so that the mass redress scheme can continue without further intervention and with higher consumer payouts.