FCA sets deadline for PPI mis-selling claims

The UK's Financial Conduct Authority Thursday confirmed it will introduce a deadline for consumers to make new payment protection insurance complaints.

But Andrew Bailey, chief executive of the FCA, defended its decision: "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". The regulator will launch a major communications campaign in August this year to help consumers to decide whether to make a claim or not.

The new PPI policy figures emerged from a freedom of information request made by Mark Davies, an adviser to a claims management company, We Fight Any Claim. It is unclear how many of these policies were mis-sold.

For more than five years claims "sharks" have been charging mis-selling victims more than £1,000 simply to reclaim money to which they are legally entitled.

Financial Ombudsman Service revealed that PPI is, and continues to be, the most complained-about issue at banks, insurers and other financial businesses. Many consumers were duped into buying it, or did not know how it worked.

He said the FCA's handling of the scandal was "unlawful, detrimental to tens of millions of consumers, and contrary to FCA's statutory objective of protecting consumers".

Under these circumstances, consumers would now be entitled to get compensation for commission above 50% of the PPI value.

However it added that some consumers, including some who have previously been told by a firm that they may have been mis-sold, may run out of time sooner.

But its shares fell today - down 1.6 per cent against a 0.8 per cent slide on the wider FTSE 100 - as the financial sector was hit by concerns over the global economy, especially ahead of the European Union referendum next week.

The most common types of PPI sold were single premium policies on unsecured loans, which totalled about 48 percent of all PPIs sold.

It disclosed that there were 78,000 PPI complaints in the second half of 2016.

While it is believed that many more claimants could yet come forward, the FCA says its two-year public awareness campaign aimed at flushing out the remaining complainants, should draw the line under the scandal.

  • Zachary Reyes