August 29 was the deadline for making a payment protection insurance (PPI) complaint, so in one sense the £40 billion mis-selling scandal has come to an end.

However, the banks and other firms that sold this type of insurance still need to investigate the complaints they received in the period preceding the deadline. Then once the firms have sent their final responses, the customers will have six months in which to decide whether to refer the complaint to the Financial Ombudsman Service (FOS).

There are also certain circumstances which a PPI complaint may still be permitted. These include:

  • The complaint concerns a new PPI sale. Anyone who takes out PPI today would still be entitled to complain to their provider on the grounds of mis-selling or undisclosed commission. If the plan was sold after the August 29 deadline then the firm must investigate any complaints in full and then make the customer aware of their right to refer the matter to the FOS.
  • The complaint concerns service or administration issues. The deadline only applies to mis-selling or undisclosed commission issues. Customers can still complain to the firm and then to the FOS if the complaint concerns service or administration matters.
  • IT issues prevented the complaint being tabled. There have been reports of phone lines becoming jammed and websites crashing in the lead up to the deadline. One major bank chose to voluntarily extend the deadline by 20 hours because of the issues caused by very large numbers of people trying to contact them about PPI. It may therefore be possible for consumers to submit complaints for a little while longer, especially if they can produce evidence of being unable to get through to the firm. The Financial Conduct Authority (FCA) says it expects firms to investigate complaints in these circumstances.
  • Other exceptional circumstances. The key word here is ‘exceptional’ and customers will be required to demonstrate that they really were unable to table their complaint earlier. One example might be if the customer was severely ill for a period in the period preceding the deadline, another might be if the customer had to deal with a significant event such as a bereavement.
  • Going to court. The deadline only applies where the customer chooses to refer the complaint to the FOS. It is still possible for a consumer to commence legal proceedings against a PPI provider in a small claims court. However, the chances of success are much lower than might have been the case at the FOS and the claimant may need to pay their own legal fees.
  • Submitting a complaint anyway. There is nothing that would prevent a firm deciding to investigate a PPI complaint and then paying compensation to the customer. However, there has been no indication that any of the biggest PPI sellers are prepared to do this. If a customer gets a reply that says either ‘we won’t investigate your complaint as it was submitted after the deadline’ or ‘we have assessed your complaint and rejected it’ then the customer will not be able to go to FOS. The FCA is unlikely to question any firm that adopts this strategy as it conducted a wide-ranging publicity campaign in the two years prior to the deadline.

A separate issue is that some consumers may be able to reclaim the tax they have unwittingly paid on PPI payouts. Where the compensation payout included statutory 8% interest, this element was taxed as savings interest, as needing to pay for the PPI could have prevented the customer from earning savings interest on that amount.

Most PPI payouts had 20% tax deducted at source on this statutory interest amount, meaning that non-taxpayers can reclaim tax on a payout received in the last four years. Basic and higher rate taxpayers could potentially be able to reclaim tax on any payouts made after April 6 2016, as this was when the Personal Savings Allowance was introduced – basic rate taxpayers now have a tax-free allowance of £1,000 in savings interest in each tax year and higher rate taxpayers have an allowance of £500.

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.