The Financial Conduct Authority is set to gather evidence on current trends in payment protection insurance complaints, warning that further interventions may be appropriate.
The regulator announced today (30 January) that it will use this evidence to assess whether the current approach is meeting the objectives of securing appropriate protection for consumers and enhancing the integrity of the UK’s financial system.
It will then consider whether “further interventions may be appropriate”.
These could include a consumer communication campaign, a possible time limit on complaints or other rule changes or guidance, or whether the continuation of the PPI scheme in its current form best meets its objectives.
In August last year, the FCA’s thematic review on PPI redress revealed that banks, credit card providers and personal loan companies had agreed to reassess more than 2.5m complaints during 2012 and 2013, which they may have either “unfairly rejected or paid too little redress to”.
The paper also noted the need for “continued vigilance” for any new issues that arise and to “act quickly” to fully understand them and, where necessary, intervene to make sure consumers get a fair deal.
Additionally, the FCA said firms are proactively sending over 5m letters to customers they have identified as being at high risk of having suffered a past mis-sale but who have not complained.
PPI was sold to borrowers alongside credit products such as credit cards. It was meant to help repay some or all of their borrowing if they lost their income for a period if, for example, they had an accident, became unemployed or sick, or died.
However, millions of people were mis-sold it and since January 2011, firms have handled over 14m PPI consumer complaints about the sale of PPI, upholding over 70 per cent and paying £17.3bn compensation.
The Financial Ombudsman Service was even forced two years ago to expand its staff by 500 to deal with the deluge of complaints. Even now, PPI remains the most complained about product, with recent Fos data revealing that last year there were 48,516 PPI complaints out of a total of 74,357 new complaints received by Fos.
The FCA’s work is due to commence shortly and views on the evidence collected will be delivered in the summer.
Until that time, consumers who believe they were mis-sold PPI should continue to complain to the firm that sold it to them and to the Fos if they are not satisfied with the response.
Crucially, making such complaints is free to consumers and there is no need to use a claims management company - a sector which itself is now under stricter regulation via the newly-empowered Ministry of Justice’s Claims Management Regulator.
Additional reporting by Donia O’Loughlin