FCA mulls 2018 deadline for PPI claims

The FCA said a deadline would “bring the PPI issue to an orderly conclusion, reducing uncertainty for firms about long-term PPI liabilities and helping rebuild public trust in the retail financial sector”.

Others include additional requirements and guidance for firms on how they should communicate with customers; there’s a review of retirement risk warnings, which the FCA noted were introduced in February without consultation; and new rules for pension freedom communications.

The Financial Conduct Authority’s (FCA) board met last Friday to assess whether there should be a “cut-off” date for when consumers mis-sold insurance policies could make a claim, and also the outcome for the industry of a landmark legal ruling by the Supreme Court previous year.

Jayne-Anne Gadhia, the boss of Virgin Money, has said that whoever replaces Martin Wheatley as head of the FCA should bring an end to the saga.

“I do think banks should be held to account for the sins of the past, but in a controlled, limited way”.

“We do not consider that the act of withdrawing funds from a dedicated tax wrapper (into which consumers have saved, over a number of years, specifically to provide for their retirement) alters the consumer’s overall wealth for the purposes of this calculation”, it said.

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

In the first half of 2015 more than 883,000 customers complained about mis-selling, a fall of 16.6% on the same period in 2014.

Such a move seems extremely likely, especially as the FCA notes that “the open-ended nature of the complaints-led approach appears to contribute to consumer inertia – it does not incentivise consumers to check whether they had or have PPI or progress complaints in a timely fashion”.

However, the regulator believes that there are still many people with genuine claims who have not yet come forward.

Normally there is an automatic deadline of three years on complaints about financial products but none was set with PPI as many customers were unaware they had bought the product.