08Mar

Firms that sold payment protection insurance (PPI) have been warned to make preparations for a late influx of complaints about the product, ahead of the August 29 deadline.

Steve Kitchen, managing director of consultancy firm Huntswood, has urged firms to ensure they have the capacity for a “surge” of complaints. For example, if a large number of complaints are made by telephone on the last day, will the firm’s phone lines become jammed? If a lot of claims are made via the firm’s website, will these sites crash?

Mr Kitchen commented:

“As with any business continuity planning, securing warm stand-by sites is critical, so that, should service levels begin to suffer during a surge, firms will be able to quickly increase their capacity.

“A surge could be extremely disruptive to firms that have made the call to wind-down operational capacity in order to return to business-as-usual level complaints. Hundreds of complaints could be filed on the day of the deadline and they will all have to be processed and treated just as all previous PPI cases.”

Mr Kitchen added that the Financial Conduct Authority (FCA) and Financial Ombudsman Service will be scrutinising firms that sold PPI more closely, saying:

“They will be keeping a very close eye on how firms deal with their customers. Great work has been done by firms to get this far with their heads still above water, but now more than ever there needs to be a game plan to get over the line.”

The FCA’s PPI claims deadline is now less than six months away. Consumers who have not already done so, need to refer their PPI complaint to their provider or to the Financial Ombudsman Service by 11.59pm on August 29, or they will lose their right to have their complaint assessed. The only circumstances in which the PPI provider will be obliged to consider complaints made after the deadline are:

  • Complaints about PPI sold after August 29
  • Complaints about service and administration of PPI policies

At the direction of the FCA, PPI providers have recently been forced to send 150,000 letters to customers, advising them that they may be able to make a PPI complaint under the Plevin ruling. They include:

  • Around 10,000 people who were originally told they couldn’t claim on the basis of an undisclosed high commission payment. These complaints were often rejected by firms on the basis that the commission was disclosed at point-of-sale, but these people may also be able to claim if they weren’t reminded about the cost of the commission throughout the policy term
  • Up to 140,000 customers who have previously had PPI mis-selling complaints rejected. These individuals have not so far had their claims assessed for undisclosed commission and have never previously received a letter about being able to claim for undisclosed commission

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