FCA to consult on introducing PPI complaint deadline

The Financial Conduct Authority is considering a deadline for claims over mis-sold payment protection insurance (PPI).

Banks have already set aside more than £28bn to compensate customers for mis-sold payment protection insurance (PPI) policies.

PPI arrangements should ensure borrowers in the occasion of infection or unemployment however were regularly sold to individuals who might have been ineligible to assert.

So far more than £20bn has been paid out in compensation for PPI mis-selling to more than 10m consumers.

The contents of the FCA’s handbook is constantly changing, with new rules and amendments to existing policy happening on an ongoing basis.

The British Bankers’ Association, which has been campaigning for a due date, had no quick remark.

The consultation will ask about bringing in a two year deadline. It hopes that by imposing a deadline, customers will be encouraged to lodge complaint.

Claims companies, which have made a fortune by helping people reclaim PPI even though it is easily done online, will no doubt be the big losers from this deadline.

Any relief among investors was tempered by the prospect of a new batch of consumers being able to claim compensation under its planned new rules.

However, the watchdog highlighted that it anticipated such a ruling would not be put in place before spring 2016.

A deadline could help end a few of the “inertia” being seen as a few consumers are not bothering to make a claim, the FCA said.

A high and growing proportion of PPI claims now go back a decade or more, with the evidence to back them becoming increasingly “stale” or patchy, the FCA said. Making a PPI complaint is easy.

Meanwhile, the number of PPI complaints lodged with the ombudsman and individual lenders has also slumped, according to figures published earlier in the week.

For a few it can feel that advertising from claims management firms through cold calls, text messages and radio asking whether you have been missold PPI are relentless.

The regulator has also issued guidelines on how it intends to interpret the Plevin ruling, which said that the 72% commission was too high.

“With the onus seemingly placed on the consumer to complain, within a fixed deadline, this should greatly reduce the redress risk associated with Plevin, in our view”, the analysts said.