FCA CEO Nikhil Rathi has been accused of threatening a consumer group with “adverse consequences” if it rejected a £9.1bn compensation scheme established to settle the motor finance scandal that saw drivers overcharged due to lenders paying commission to car dealerships between 2007 and 2024.

Consumer Voice (CV) has said the scheme is short-changing consumers to save the lenders from big bills and has submitted a legal challenge.

The threat by Rathi is said to have taken place during a Microsoft Teams call with the directors of CV in April, hours before the deadline to file legal challenges against the FCA’s proposed redress scheme.

Legal documents seen by the Guardian said the alleged comments by Rathi, were “an inappropriate intervention by a public official”.

Rathi warned the FCA would be “unable to collaborate” with CV if it took legal action, “suggesting adverse consequences for CV’s future engagement with the regulator and adverse press briefings against it”, the filings said.

“The implication was clear: the FCA’s willingness to engage constructively with CV was contingent on CV not challenging the scheme, and would give way to hostility if it did,” the documents claimed.

Rathi also allegedly claimed CV’s potential legal challenge was the “biggest risk to the scheme” and that plans to get money to millions of victims by this Christmas would fail if directors followed through with their plans.

The FCA has since tried to get CV’s claim rejected by alleging its co-founders have not been transparent about their funding and potential conflicts of interest.

Legal documents lodged by the regulator last month suggested CV was not transparent about its relationship with its lawyers at Courmacs Legal, as both firms “operate for profit in the sphere of claims management”.

Consumer Voice countered it partners with law firms to help consumers “get back money they’re owed from rule-breaking companies”.

A spokesperson for the FCA told the Guardian: “we don’t recognise the way this conversation has been characterised”, adding that officials had spoken to a range of parties, including lenders and claims firms, ahead of the deadline.

“It was important to explain the implications for consumers and that we would defend the scheme robustly as the best way of getting compensation paid,” the FCA said. “We were also clear that we would be upfront with consumers about why expected compensation would be delayed.”

CV co-founder Alex Neill said: “We remain resolute and confident in our challenge on behalf of millions of consumers who are being short-changed by the redress scheme.”