A deadline on when a payment protection insurance (PPI) claim can be made has looked likely for some time. Now for the first time we have a date – the Financial Conduct Authority (FCA) is proposing June 30 2019 as the deadline, contrary to earlier suggestions of a cut-off sometime in 2018. Essentially, any customer who has received a firm’s acknowledgement of a PPI complaint by June 30 2019 will still be entitled to refer the matter to the Financial Ombudsman Service (FOS), but any customer who misses this deadline will not be able to refer it to the FOS.
The deadline will also only apply to complaints made about the suitability of PPI – complaints about claims and administration will not be subject to a deadline. There will also be no restriction on the ability of consumers to claim for PPI sold after the deadline.
A major publicity campaign will commence on June 30 2017, two years before the deadline, to ensure that people are aware of the need to submit their PPI complaints before the middle of 2019. The campaign will include advertising on TV and on outdoor billboards, and in the words of the regulator, “the consumer communications campaign would be designed to reach all adults in the United Kingdom.” The campaign is to be funded by the 18 firms that were collectively responsible for 90% of the PPI complaints between August 1 2009 and August 1 2015, and the firms will pay £3.64 for each PPI complaint received between these dates.
Andrew Bailey, chief executive of the FCA said:
“Putting a deadline on PPI complaints will bring the issue to an orderly conclusion in a way that protects both consumers and market integrity.
“We have listened to all the feedback we have received and believe that the steps we are taking are the right ones. We will ensure that our communications campaign will engage with all those who could be affected, particularly vulnerable consumers.”
Gillian Guy, Chief Executive of consumer organisation Citizens Advice largely welcomed the deadline, but expressed fears on how claims management companies might react to the news. Ms Guy said:
“A deadline on raising PPI mis-selling claims will help to bring finality to this ongoing scandal.
“But we are concerned consumers will be inundated by cold calls from claims management companies who charge up to 40% of what victims get in compensation, despite people being able to make these claims for free.
“It’s crucial any deadline is backed up by free and independent advice so people can get all the help they need to make a claim. The claims management regulator should implement its proposals to cap the fees that companies can charge consumers.”
In recent weeks Barclays and Royal Bank of Scotland have further increased their PPI provision, perhaps because they believe the announcement of a deadline will lead to a surge of new complaints.
At the same time as it announced the claims deadline, the FCA also opened a consultation into some proposed changes to the way it will allow commission-related PPI complaints to be made. Following a recent court case, known as the Plevin judgement, consumers will be able to table PPI complaints on the grounds that the firm selling the insurance failed to disclose an amount of commission that was equivalent to 50% or more of the insurance premium. The regulator is now proposing that profit share is included in the definition of commission to be used, and that any previous rebates paid to a customer when they cancelled their PPI policy can be used to reduce any redress due.
This consultation closes on October 11 2016, and new rules regarding the commission issue are expected to come into force in March 2017. The forthcoming advertising campaign will specifically highlight to consumers that PPI complaints can be made on the grounds of undisclosed commissions, as well as for mis-selling.
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.