Millions of motorists waiting for compensation from the UK's £9.1bn car finance repair scheme are facing further delays after the financial watchdog was forced to suspend payments.
The Financial Conduct Authority (FCA) suspended the process, facing legal challenges from four companies unhappy with its plans to offset those mis-sold car loans.
The payments, initially scheduled to begin this year, now face significant delays.
The UK's High Court has agreed to hear the legal challenges in December or February next year, with a ruling expected in the coming months.
The financial services arms of carmakers Volkswagen and Mercedes-Benz, the auto finance arm of French bank Credit Agricole and consumer group Consumer Voice are asking courts to strike down the plan, arguing its rules are illegal.
The FCA confirmed that the court had ordered the suspension of parts of its car finance scheme on terms agreed with the four parties involved.
The pause means that lenders will no longer have to calculate or pay compensation to people who are owed money, or inform customers of the compensation they are owed, until the legal process is concluded.
This slows the payment process of around 12.1 million car finance deals that are eligible for compensation, to an average of £829 per payment, according to the FCA's plans.
However, they will have to continue to prepare for the plan and progress customer complaints where possible, including informing people if they are not owed any compensation.
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Companies are also expected to contact customers who have complained to explain the legal challenges and why they are causing delays.
If the judges decide to uphold his plan and the ruling is not appealed, then he expects payments to begin in 2027.
The FCA said it will have to decide what to do next if the courts decide to overturn the program and there cannot be an industry-wide compensation plan.
This could involve moving to a complaints-based approach to resolving individual complaints.
Without a plan in place, the FCA has estimated that up to 19 million complaints would have to be dealt with individually, taking three years and costing lenders an additional £6 billion.
