Mercedes-Benz Group has joined a growing list of challengers to a multibillion-dollar UK compensation scheme designed to address the mis-selling of motor finance loans.

The plan, introduced by the Financial Conduct Authority, aims to resolve a long-running scandal affecting millions of customers who were sold car loans under unfair conditions. The scheme is estimated to cost around $12 billion and was intended to streamline compensation payments, News.Az reports, citing Reuters.

Mercedes-Benz has confirmed it is appealing the proposal, becoming the fourth group to formally challenge the regulator’s plan. The FCA said it is reviewing multiple legal objections and will outline its next steps soon.

The compensation framework was revised earlier this year to balance consumer protection with the financial impact on lenders and car finance providers. It was expected that payouts—averaging around £830 per agreement—could begin this year.

However, legal disputes now threaten to delay the process, potentially prolonging one of the UK’s largest financial mis-selling cases.

Several major financial institutions, including Barclays and Banco Santander, have already set aside billions to cover potential compensation costs, though they are not directly challenging the scheme.

Other automotive groups are also reviewing their positions, with reports suggesting additional challenges may follow. Meanwhile, some industry players argue the current framework offers the fastest path to resolving claims.

Consumer advocates have also raised concerns, with one group preparing its own legal challenge, arguing that the proposed payouts may not fully compensate affected customers.

The outcome of the legal battles could significantly reshape how compensation is delivered—and how quickly millions of drivers receive payments.

News.Az 

By Aysel Mammadzada