A blistering war of words has broken out between the City watchdog and the firms leading the consumer legal challenge to its £9bn motor finance scheme. The Financial Conduct Authority (FCA) has urged the Upper Tribunal to throw out the case entirely as it slammed Courmacs Legal and its client
Samuel Norman
Wednesday 08 July 2026 3:18 pm
A blistering war of words has broken out between the City watchdog and the firms leading the consumer legal challenge to its £9bn motor finance scheme.
The Financial Conduct Authority (FCA) has urged the Upper Tribunal to throw out the case entirely as it slammed Courmacs Legal and its client Consumer Voice, for a serious “want of candour” for allegedly masking its motives.
The duty of candour in judicial review is a common-law obligation requiring all parties to proactively disclose all material facts and reasoning to the court.
The FCA claimed both firms “failed to give a full and frank explanation” of their commercial activities and incentives in the scheme.
In legal documents presented by the watchdog, it said the delay of its scheme through the challenge could be a bid to “channel more cases through Consumer Voice to [Courmacs Legal]” in a move “generating remuneration for both”.
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The case follows backlash to the regulator’s £9bn motor finance redress program announced in March, which put consumers in up to 12.1m deals in line for an average payout of £830.
The car misselling saga began in early 2024 over the use of ‘secret’ commission arrangements with dealers and lenders, leaving consumers in the dark.
Top City banks have been put on the hook for compensation payouts, including Lloyds Banking Group, which has set aside £2bn, and Barclays at £325m.
The FCA’s scheme is also receiving challenges from the financial services arms of three manufacturers that – contrary to Consumer Voice – argue it has gone too far in its impact on the industry.
FCA’s accusations ‘disgraceful,’ says consumer group
The FCA suspended parts of its scheme earlier this month ahead of the legal battle, which is expected to take place as late as February 2027.
Read more City watchdog suspends parts of £9bn motor finance scheme after industry backlash
Alex Neill, the co-founder of Consumer Voice, told City AM the FCA’s accusations were “disgraceful” and “untrue”.
Neill said Consumer Voice had previously been invited to join the regulator’s redress design panel, but now that it was challenging the scheme, it said the regulator was attempting to “discredit” it.
“That raises serious questions about why the FCA has chosen to attack the only legal challenge brought on behalf of consumers.”
Courmacs Legal referred to Consumer Voice’s response when contacted by City AM.
The watchdog has pressed claimant firms over the last year with an investigation into “poor practices” and “aggressive marketing” in the sector.
Last October, City AM revealed the financial regulator was being accused of “massive overreach” after sending letters to law firms and claims management companies requesting information on their motor finance services.
The letters, sent in August, called for copies of contracts, an explanation of the consumer’s journey, and details of how the firm will determine fees.
In the letter, the watchdog didn’t say it was working with the legal watchdog, the Solicitors Regulation Authority (SRA), and instead had made it aware of its interest in this matter.
The legal watchdog had previously warned firms it must inform clients of the FCA’s redress scheme that would “allow clients to pursue a claim for themselves, free of charge”.
When approached by City AM, SRA declined to comment on the FCA’s accusations against Courmacs Legal and Consumer Voice.
Read more Banks ‘not ready’ for motor finance scheme, says City watchdog
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