The Financial Conduct Authority has today confirmed that it will introduce a deadline for making new payment protection insurance (PPI) complaints.
The final deadline for making a new PPI complaint will be 29 August 2019. To encourage consumers to decide whether to act about PPI before the deadline, the FCA will run a two-year consumer communications campaign, which will be launched in August 2017.
Andrew Bailey, Chief Executive of the FCA said:
Putting in place a deadline and campaign will mean people who were potentially mis-sold PPI will be prompted to take action rather than put it off. We believe that two years is a reasonable time for consumers to decide whether they wish to make a complaint. We have carefully considered the feedback we received and we still believe that introducing a deadline for PPI complaints and a communications campaign warning of the deadline will benefit consumers.
The FCA has also made final rules and guidance related to how firms should handle complaints in light of the Supreme Court judgment in Plevin v Paragon Personal Finance Ltd (Plevin). The Plevin decision means that consumers may have new grounds to complain about PPI regarding the amount of money that the providers received for the sale if the failure to disclose that commission made the relationship unfair.
As proposed, the FCA’s approach includes a 50% commission ‘tipping point’ at which firms should presume, for handling PPI complaints, that the failure to disclose commission gave rise to an unfair relationship, and that profit share should be included in firms’ calculation of commission. Redress will be calculated as the excess commission over the 50% tipping point.
The FCA will also require all firms to write to previously rejected complainants who are eligible to complain in light of Plevin in order to explain the new basis for complaining to them.
Consumers with live PPI policies will now be able to complain after the deadline if they have a future claim on their policy rejected for reasons related to the sale. The complaint must be related to the reason the claim was rejected, for example, eligibility, exclusions or limitations.
Complaints about PPI policies sold after 29 August 2017 are not subject to the deadline.
The rules surrounding Plevin will come into effect at the same time as the deadline rule – not three months before as originally planned.
What should consumers do?
Consumers who are unhappy about PPI should continue to complain to the firms concerned and to the Financial Ombudsman Service if they are not satisfied with the response. Consumers have until 29 August 2019 at the latest to make their complaint, but some consumers, including those who have previously been told by their firm that they may have been mis-sold, may run out of time sooner.
Making a complaint is free to consumers and most people should not need to use a claims management company to assist them. Consumers who intend to complain about PPI should do so as soon as possible.