The Financial Conduct Authority has today published its consultation paper on plans to bring in a 2018 deadline for PPI claims – and revealed that 18 firms which received the most PPI complaints will be asked to cough up £42 million to fund an ad campaign promoting the deadline.
The FCA document also sets out proposals to clarify how complaints about undisclosed PPI commission should be handled in the wake of the Plevin v Paragon Personal Finance Ltd Supreme Court case.
The court ruling held that Susan Plevin was treated unfairly because she wasn’t told about the large amount of commission (71.8%) taken from her PPI payment. The FCA document says firms should generally consider a complaint on the grounds of an unfair relationship between lender and borrower if commission was above 50%.
The time-bar for PPI claims was first announced in October, when the FCA said it wouldconsult on introducing a deadline – a move branded “anti-consumer” by MoneySavingExpert.com founder Martin Lewis.
We’ll be submitting a full response before the consultation closes on 26 February 2016. But here’s Martin’s initial response and a summary of key points from the consultation paper.
‘It’s a done deal’
Martin says: “This is not a consultation in the true sense. We know it’s a done deal that the FCA is going to put a time-bar on PPI reclaiming, so all it’s really asking for is suggestions of how it tweaks its implementation.
“Yet that doesn’t stop the fact that we are very disappointed the FCA has chosen to put a hold on PPI reclaiming even after many warnings of the danger. How can it argue this is being done to protect consumers when the uphold rate at the Financial Ombudsman is still over 70%?
“To go to the Ombudsman you have to first complain to the bank, so it’s likely banks are still wrongly rejecting claims from over half of those who have been mis-sold.
“The time limit itself is at least a longish one, although we think it should be longer, and the FCA is choosing to do a widespread communication piece. Yet it must solve the problem of how banks deal with complaints, and ensure people aren’t wrongly rejected, then ruled out.
“The urgent clarion-call to consumers is if you’ve had a loan, credit card or mortgage in the last 10 years you should be checking now whether you had PPI on it and if so, was it mis-sold? Many people are shocked they had PPI when they didn’t think so, as one way it was mis-sold was it was added even though they said no.
“Plus if you have already made a past PPI complaint that was rejected by the bank but you did not go to the Ombudsman, you should restart your complaint now. Banks have been fined for poor complaints handling – your bank rejection does not mean you weren’t mis-sold.”
Anyone who’s had a loan, credit card, mortgage, car finance or other credit agreement in the past 10 years should check NOW if they can claim. See our PPI Reclaiming guide for how to complain yourself, for free.
What’s the FCA proposing?
Here’s a summary of the FCA’s main proposals: