A consumer group is launching legal action in a bid to change the car finance scandal compensation scheme.
Consumer Voice told The Guardian it intends to take on the Financial Conduct Authority, which announced last month that millions of motorists who were mis-sold car finance agreements are due to receive £829 on average in compensation.
The group says the scheme doesn't go far enough and that millions of consumers could be left "out of pocket by several hundred pounds per claim".
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Payouts were due to start this summer but a legal challenge would delay this.
Alex Neill, co-founder of Consumer Voice, said: "Millions of drivers were overcharged through hidden and unfair commission, yet the FCA's scheme risks leaving many of them missing out on hundreds of pounds they're owed.
"People have already been let down once by lenders. They should not now be let down again by the regulator that is supposed to protect them. The FCA needs to fix the scheme to ensure it delivers fair and lawful compensation for drivers."
According to The Guardian, the challenge would go to the upper tribunal, where a judge would review how the watchdog came to its conclusion on the redress scheme.
Read more:
Car finance scandal: What happened and am I eligible for compensation?
Consumer Voice has teamed up with specialist law firm Courmacs Legal to launch the legal action.
An FCA spokesperson said: "Our scheme is the quickest, fairest way to compensate consumers.
"It seems contradictory that organisations claiming to represent consumers would seek to delay payouts for millions of people."
(c) Sky News 2026: Car finance scandal compensation could be delayed as consumer group launches legal actions
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