Mercedes-Benz, VW join challengers of $12 billion UK car finance redress scheme (updated)
29/04/2026 15:53
Recasts top with Volkswagen confirming challenge, adds Credit Agricole no comment, paragraph 12 VW has asked courts to clarify elements of redress scheme FCA to set out its approach later this week Legal challenges could delay consumer compensation FCA says firms failed to disclose key information to customers By Kirstin Ridley and Sam Tobin LONDON, April 29 (Reuters) - Mercedes-Benz MBGn.DE and Volkswagen VOWG.DE are among four groups to challenge a 9.1 billion pound ($12.3 billion) consumer redress scheme imposed by Britain's markets regulator on the UK motor finance industry for misselling historic motor loans. The financial services arm of VW said on Wednesday that it had asked the courts to help clarify elements of the compensation plan hours after Mercedes-Benz confirmed it was also among those challenging the scheme. "We support redress for customers who were genuinely disadvantaged, but it is also important that any scheme is lawful, fair and properly targeted," a spokesperson for Volkswagen Financial Services UK said. The move is disappointing for the Financial Conduct Authority, which said three lenders and a consumer group were challenging a compensation scheme designed to draw a line under a 17-year scandal. It did not identify the lenders. "We are considering our approach and will set out more later this week," a spokesperson said. The FCA in March trimmed the final bill for one of Britain's costliest financial misselling scandals in an attempt to balance its duty to protect consumers from harm, promote growth - and ward off legal challenges. The scheme is designed to compensate consumers for inadequately disclosed commissions paid by lenders to motor dealerships and where contractual ties between lenders and dealerships were not properly visible for customers. The FCA had hoped the first payments to consumers, estimated at 830 pounds per vehicle loan agreement, would start this year. But legal challenges can be lengthy and costly. Banks including Lloyds LLOY.L, Santander SAN.MC, Barclays BARC.L, specialist lender Close Brothers CBRO.L and the finance arms of vehicle manufacturers have collectively set aside billions of pounds for compensation. Leading banks are not challenging the scheme, although Santander UK SANS_pa.L, the Spanish bank's British arm, set aside another 207 million euros ($242.2 million) to cover redress costs on Wednesday. Sky News first reported that Mercedes-Benz planned to challenge the scheme and that Volkswagen VOWG.DE was expected to follow suit. BMW told Reuters that although it did not agree with every aspect of the redress scheme, it believed it provided the fastest and easiest route to resolution for customers. Credit Agricole CAGR.PA declined to comment. Consumer group Consumer Voice, meanwhile, said on Monday it had also filed a legal challenge because the FCA scheme "systematically undercompensates consumers". ($1 = 0.7408 pounds) ($1 = 0.8546 euros) (Reporting by Kirstin Ridley and Sam Tobin, writing by Kirstin Ridley; Editing by Sharon Singleton) ((kirstin.ridley@thomsonreuters.com; +44 (0) 207 513 5666;))