The Financial Conduct Authority (FCA) has proposed a final deadline of spring 2018 for all payment protection insurance (PPI) complaints to be made against firms.
The FCA announced this will morning that it will launch a consultation by the end of 2015, which will include proposals for new rules around PPI complaints handling, along with the 2018 deadline.
The announcement came in a highly detailed update covering the FCA’s plans for further intervention into how PPI complaints are handled.
The update says the FCA will, by the end of 2015, consult on the introduction of a deadline by which consumers would need to make their PPI complaints or else lose their right to have them assessed by firms or by the Financial Ombudsman Service.
This deadline for complaints is likely to fall two years from the date the proposed new rules for PPI complaints handling come into force.
The new rules are likely to come into force in the spring of 2016, so that means consumers would have until at least spring 2018 to make their PPI complaints.
The consultation will also set out the regulator’s plans for an FCA-led communications campaign to prompt consumers to complain in advance of the 2018 deadline.
Financial services firms will also be expected to pay for this campaign. The FCA’s consultation will include proposals for fees that banks and other providers will pay to fund the initiative.
The FCA said that a deadline and communications campaign would “bring the PPI issue to an orderly conclusion, reducing uncertainty for firms about long-term PPI liabilities and helping rebuild public trust in the retail financial sector.”
Its update states: “We take the view that a deadline and communications campaign would help bring finality and certainty.”
The Plevin case
The FCA will also consult, also by the end of the year, on proposed rules and guidance concerning the handling of PPI complaints in light of the Supreme Court’s decision in Plevin.
The consultation will look at how PPI complaints are managed fairly in light of the Plevin judgment concerning a claim under s.140A of the Consumer Credit Act 1974 (Note 7).
This focussed on the non-disclosure by a lender of the level of commission on a PPI contract.
The proposed deadline of July 18 would also apply to the handling of these complaints – about where the level of commission was not disclosed.
By Marcel LeGouais