The Financial Conduct Authority (FCA) has engaged advertising agencies M&C Saatchi and Manning Gottlieb ahead of its proposed publicity campaign to alert consumers to the introduction of a deadline for payment protection insurance (PPI) claims. It has reportedly already paid £444,413 to Saatchi, but nothing to Manning so far.
The FCA has previously stated that it intends to introduce a deadline of June 30 2019 to make a PPI claim. If a complaint is made to a firm after this date, then it will not be considered by the Financial Ombudsman Service, unless the customer’s grievance concerns a policy sold after the deadline, or concerns administration and claims activity rather than potential mis-selling.
Complaints made as a result of the Plevin judgement will also be subject to the deadline, even though the FCA is yet to announce final rules on how these complaints should be handled. A landmark court ruling in the case of Plevin v Paragon Personal Finance has paved the way for consumers to table PPI complaints on the grounds that the selling firm failed to disclose a commission payment that amounted to at least 50% of the premium.
The nationwide advertising campaign will encompass a wide range of media, from print media to television advertising, billboards and online publicity. The aim is to ensure that as many people as possible are aware of the impending deadline, and are therefore prompted to check whether they have PPI, and to make a complaint about the sale of the product should they wish to.
The total cost of the campaign is estimated at £42 million, and the full costs will be borne by the 18 firms that each received over 100,000 complaints about PPI between August 1 2009 and August 1 2015. Evidently the largest high street banks will be amongst these 18 firms.
During 2016, a number of high street banks increased their PPI compensation reserves once again, in anticipation of a spike in complaint volumes caused by the announcement of a deadline. Lloyds Banking Group has now set aside £17.1 billion, and the industry as a whole has slated £40 billion to pay PPI compensation claims.
In late 2016, the FCA announced that it was still reviewing the large number of responses it has received to its consultation on the introduction of a deadline. It intends to issue a further statement on PPI during the first six months of 2017. Some media outlets have reported that the deadline is likely to be put back as a result, perhaps to the autumn of 2019, but there has been no suggestion that the regulator will not proceed with the introduction of the deadline.
The advertising campaign is likely to commence two years before the deadline comes into force.
The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.