London tribunal sees three motor‑finance lenders challenge the FCA’s £9.1bn redress plan, arguing it breaches the European Convention on Human Rights. Volkswagen Financial Services, Crédit Agricole, and Mercedes‑Benz Financial Services claim the scheme infringes property rights by forcing blanket interest‑rate cuts. The lenders argue the calculation method lacks evidence and overreaches regulatory authority, potentially setting a precedent for future consumer‑finance disputes.

The FCA estimates the scheme will return £7.5bn to 12.1mn car loans from 2007‑24, costing £1.6bn to administer. Lenders complain that a flat 17% or 21% reduction in annual interest fails to reflect individual loss, while consumer groups claim the plan under‑compensates buyers for owners.

Volkswagen’s lawyer, Richard Handyside KC, warned the scheme creates a disproportionate interference with property rights, suggesting the regulator could design a more targeted approach. Mercedes‑Benz’s counsel, Lord Keen of Elie KC, noted the FCA’s assumptions about captive finance arms are unfounded, calling the regulator’s view of the market "monolithic".

The FCA maintains the plan is fair, proportionate, and the quickest route to correct past commission‑based lending abuses. Until the tribunal resolves the challenge, payouts remain suspended, leaving lenders exposed to potential liability and investors wary of the regulatory climate in the motor‑finance sector.