The motor finance scheme is suspended. The rejections are not.

On 2nd July 2026 the Upper Tribunal suspended parts of the FCA's motor finance consumer redress scheme, on terms the FCA agreed with the four firms challenging it: CA Auto Finance UK, Consumer Voice, Mercedes-Benz Financial Services UK and Volkswagen Financial Services (UK). The hearings are listed for 14th to 18th December 2026, or 16th to 26th February 2027 if anyone applies for further expert evidence or disclosure.

Since then the advice going round has been simple. It is suspended. Sit tight until 2027.

That advice is wrong, and it is wrong in a specific way that will cost people money between now and January.

What was actually suspended

Read the FCA's own statement rather than the coverage of it. Firms do not have to "calculate or pay redress, or send communications about compensation owed under the scheme" until the Tribunal process concludes.

That is the whole of it. The suspension covers the paying half of the scheme. Nothing else.

Every other rule still binds. Firms must still identify relevant complaints and qualifying agreements. They must still gather commission and disclosure data. They must still hand over brokers' documents within a month of a request. They must still cooperate with the Financial Ombudsman Service on cases already referred to it. And they must still respond to complainants they have decided are not owed compensation, on a fixed timetable: 18th November 2026 for agreements from 1st April 2014 onward, 18th January 2027 for pre-April 2014 agreements, and within five months of receipt for complaints arriving after that.

Look at what that combination produces. For the next five months, the machinery that pays people is switched off, and the machinery that refuses people is running to a deadline. There is no equivalent long-stop date by which a lender must tell you that you have won, because that communication is suspended. There is a hard date by which it must tell you that you have lost.

So the realistic forecast for the rest of 2026 is a large volume of rejection letters and almost no payments. That is close to the opposite of what most people hear in the word "suspended".

Why a rejection is worth more than a wait

A letter telling you that you are not owed compensation looks like a scheme outcome, but it operates as a final response, and a final response is the thing that unlocks the next door.

The FCA is explicit about this. If you are told you are not owed compensation and you disagree, you can ask for a review or escalate to the Financial Ombudsman Service without waiting for the scheme outcome.

That matters because the ombudsman route has otherwise narrowed. Since 31st March 2026 the Financial Ombudsman Service is not taking on motor finance commission complaints that are scheme cases. Complaints that reached it before 30th March 2026 and are still undetermined carry on to an answer. Everything else that falls inside the scheme has been absorbed by the scheme. For most people who complained this year, the ombudsman door is currently shut.

A rejection is one of the few things that opens it again.

And there is a clock on that too. Under the FCA's complaint handling rules for motor finance commission complaints at DISP App 5.2, where a final response was issued after 29th January 2026, the normal six-month window to refer the complaint to the ombudsman applies. Six months from the letter, not six months from the Tribunal handing down judgment in 2027. Someone who receives a rejection on 18th November 2026, files it under "wait and see because the scheme is suspended", and comes back to it after the February hearings, has spent most of that window doing nothing.

The numbers this is worth arguing about

PS26/3 was confirmed on 30th March 2026 and covers unfair treatment arising from inadequate disclosure of commission and lender-broker ties on agreements between 6th April 2007 and 1st November 2024. The FCA's estimate is roughly £7.5bn across the industry, at an average of about £829 per eligible agreement plus interest.

Averages hide the shape. £829 is a mean across a very wide spread of agreement sizes and commission structures, so a mid-size PCP with a high commission and no disclosure sits well above it and a small hire purchase agreement sits well below. The point is that a rejection is a decision about a four-figure sum, arrived at by the party that would have to pay it, at a moment when it cannot be made to pay anything.

Worth noting the date on the calendar this week: the implementation period for the earlier track, agreements from 6th April 2007 to 31st March 2014, ends on 31st August 2026.

The second signal, from the ombudsman's own data

The Financial Ombudsman Service has consulted on charging claims management companies and other professional representatives up to £250 to bring a case, cut to £75 where the outcome favours the consumer. It stays free for people who come direct, and for family, friends, charities and voluntary organisations bringing a case on someone's behalf.

The figures FOS published alongside that are the interesting part. Between April and December 2024, professional representatives brought 47 per cent of cases and succeeded in 26 per cent of them. Consumers who came direct succeeded in 38 per cent.

Set that against what is coming. A rejection wave is exactly the market a claims management company advertises into, and it will arrive on a known date. The consumer being marketed to will be told the process is complicated, that the scheme is suspended, and that they need help. The ombudsman's own numbers say the direct route performed better, and it is the one that costs nothing.

What to do with this

If you have a motor finance agreement from between 2007 and 2024 and you have not complained, complain to the lender now, in writing, for free. Being in the queue is what puts you on the rejection timetable, and the rejection timetable is the only part of this that is currently moving.

If you already have, put 18th November 2026 or 18th January 2027 in the diary, depending on when your agreement started, and treat any letter that arrives as the start of a six-month clock rather than the end of the matter.

And when a regulator says a scheme is suspended, read the order and find out which half.

Also worth your time this week

Nine things worth knowing from the week to 22nd August 2026.

• The motor finance rejection clock is running even though the scheme is suspended. Parts of the FCA redress scheme have been suspended since 2nd July 2026, with Upper Tribunal hearings listed for 14th to 18th December 2026 or 16th to 26th February 2027. Only the calculation and payment of redress is paused. Lenders must still respond to complainants they say are not owed compensation by 18th November 2026 for agreements from 1st April 2014, and 18th January 2027 for earlier ones. FCA statement.
• The 2007 to 2014 track hits a milestone on 31st August. The implementation period for the earlier of the two scheme tracks ends this month. PS26/3.
• The ombudsman is now open to buy-now-pay-later complaints. Since 15th July 2026, eligible BNPL disputes can be referred to the Financial Ombudsman Service if the provider will not resolve them. FOS.
• Going direct to the ombudsman still outperforms paying someone. FOS is consulting on charging professional representatives up to £250 a case, £75 if the consumer wins. Its own data shows representatives brought 47 per cent of cases between April and December 2024 but succeeded in 26 per cent, against 38 per cent for consumers who came direct. It remains free to complain yourself. FOS consultation.
• Complaint volumes are falling. FOS expects 199,000 new cases in 2026/27, down from nearly 306,000 in 2024/25, largely on fewer motor finance and fewer representative-brought complaints. FOS.
• A former CEO was fined £56,400 for what happened to customers' pensions. The FCA banned Demetrios Hadjigeorgiou, ex-CEO of SVS Securities, over conduct between May 2018 and August 2019 including a decision that cut customer bond values by 10 per cent on sale while generating £359,800 for the firm. FCA.
• Adverts are being cloaked to hide subscription traps. Which? found advertisers serving a compliant advert to ad platforms and a different one to real users, funnelling people into recurring payments through brands that rotate weekly. Which?.
• 4.35 million households are behind on energy bills. That is around 15 per cent of households and a 70 per cent rise on January 2022, with one in eight behind on water. Citizens Advice.
• Broadband compensation is worth more than most people claim. Ofcom's automatic rates rose on 1st April 2026 to £10.34 a day for delayed repairs, £32.31 for a missed appointment and £6.46 a day for a delayed start, and now rise annually with CPI. ISPreview.

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