RegulationOct 2 2015

FCA to consult on PPI complaints deadline

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FCA to consult on PPI complaints deadline
ByEmma Ann Hughes

The Financial Conduct Authority has now decided to consult, by the end of the year, on the introduction of a deadline by which consumers would need to make their payment protection insurance complaints.

The regulator said the deadline would set a point by which consumers must complain about their PPI or else lose their right to have them assessed by firms or by the Financial Ombudsman Service. The Fos declined to comment.

The FCA said it will publish its consultation paper on the deadline for PPI complaints and on rules and guidance before the end of this year.

The FCA has also decided to consult on proposed rules and guidance concerning the handling of PPI complaints in light of the Supreme Court’s decision in Plevin.

In Plevin v Paragon Personal Finance Ltd in November 2014 the Supreme Court ruled that a failure by a lender to disclose to a client at point of sale the large commission payment it received from the sale of a single premium PPI policy made the relationship between the lender and the borrower unfair under section 140A of the Consumer Credit Act 1974.

Such complaints would also be subject to the proposed deadline, which, subject to consultation, would not be before spring 2016 – hence PPI consumers would have until at least spring 2018 to complain.

The consultation will also set out our plans for a proposed FCA-led communications campaign designed to prompt consumers to complain in advance of that deadline. This will include a proposed fee rule concerning the funding of the proposed communications campaign.

Those hoping this may lead to a long stop for adviser liability will be disappointed as the FCA stated the proposed rules and guidance would only apply to PPI complaints where a claim could be made against a lender under section 140A.

That means that sums must have been payable (or capable of becoming payable) under the underlying credit agreement (which the PPI covered or covers) on or after 6 April 2008.

It was back in January that the FCA announced it would gather evidence on current trends in payment protection insurance complaints, warning that further interventions may be appropriate.

The regulator announced this evidence would be 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.

In a statement, the FCA said: “The consultation paper will include full details of the various proposed rules and guidance summarised above, the evidence we have assessed, our reasons for proposing them, and our assessment of their costs and benefits.