Overview
The UK Financial Conduct Authority’s motor finance consumer redress scheme (PS26/3) requires lenders to refund customers of car-finance contracts with undisclosed default interest, after the UK Supreme Court ruled in 2025 that such clauses can amount to an “unfair relationship” under s.140A of the Consumer Credit Act 1974 (per FCA and the court). The scheme was finalized in 2026; a legal challenge is pending in the Upper Tribunal, with hearings scheduled for December 14, 2026 and February 16, 2027 (per reporting, July 2026). If the scheme stands, payments to customers are expected around 2027 (per law-firm reporting).
Companies involved
Settlement amounts
Per-customer refunds depend on the contract (undisclosed default interest, CCA s.140A) (per the FCA scheme). Payments expected around 2027 if the scheme survives the pending legal challenge (per law-firm reporting, July 2026). No amount can be promised.
Key dates
- December 14, 2026Upper Tribunal hearing scheduled (also Feb 16, 2027) (per reporting)
- June 24, 2026FCA updates scheme timelines (per FCA)
- April 1, 2026FCA finalizes the motor finance consumer redress scheme (PS26/3) (per FCA)
- August 1, 2025UK Supreme Court ruling on undisclosed default interest (CCA s.140A) (per the court)
Updates
- Updated Jul 7, 2026Seeded from research (Jul 2026): FCA scheme PS26/3 finalized; legal challenge in Upper Tribunal, hearings Dec 14, 2026 / Feb 16, 2027; payments expected ~2027 (per FCA and law-firm reporting).
Notable filings
No notable filings recorded yet. Docket entries are added from public court records as they appear.
FAQ
What is the UK motor finance redress scheme?
The FCA’s motor finance consumer redress scheme (PS26/3) requires lenders to refund customers of car-finance contracts with undisclosed default interest (per FCA). The scheme was finalized in 2026.
Why does the scheme exist?
The UK Supreme Court ruled in 2025 that such default-interest clauses can amount to an “unfair relationship” under s.140A of the Consumer Credit Act 1974 (per the court and the FCA).
How much will I receive?
Per-customer refunds depend on the contract — specifically the undisclosed default interest (per the FCA scheme). No amount can be promised; the scheme calculator and your contract terms determine the figure.
When will payments start?
If the scheme stands, payments to customers are expected around 2027 (per law-firm reporting, July 2026).
Is the scheme still valid?
A legal challenge is pending in the Upper Tribunal (Tax and Chancery Chamber), with hearings scheduled for December 14, 2026 and February 16, 2027 (per reporting, July 2026).
Who is eligible?
Customers of car-finance contracts affected by undisclosed default interest under the CCA (per the FCA scheme). Eligibility depends on your specific contract; this is not legal advice.
Think this matters to you?
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