The Financial Conduct Authority has confirmed it plans to push ahead with the package of proposals on payment protection insurance (PPI) complaint deadlines and rules laid out in its November consultation.
This includes imposing a deadline for making new PPI complaints and launching a consumer communications campaign to raise awareness of the deadline and surrounding issues.
The regulator also stated it intends to make rules and guidance on handling PPI complaints in light of the Supreme Court judgment in Plevin v Paragon Personal Finance.
In the case, the court found a failure to disclose to a client a large commission payment on a single premium PPI policy made the relationship between a lender and borrower unfair under section 140A of the Consumer Credit Act 1974.
Before making a final decision on some or all of the proposals, the FCA is consulting on changes to the proposed rules and guidance concerning the handling of PPI complaints in light of Plevin.
These proposed changes are in response to feedback received on the November consultation and relate in particular to three key aspects of the rules and guidance:
• to include profit share in its approach to the assessment of fairness and redress;
• to allow previous rebates to a consumer when they cancelled their PPI policy to be partly reflected in (and so reduce) any redress due;
• to clarify how firms should assess fairness and redress where commission or profit share rates vary during the life of the PPI policy.
The FCA will consider the feedback after the consultation closes on 11 October.
Andrew Bailey, chief executive of the FCA, explained that putting a deadline on PPI complaints will bring the issue to an orderly conclusion in a way that protects both consumers and market integrity.
“We have listened to all the feedback we have received and believe that the steps we are taking are the right ones,” he stated. “We will ensure that our communications campaign will engage with all those who could be affected, particularly vulnerable consumers.”
If the FCA decides, following assessment of further feedback, to proceed with these proposals, it is anticipated that the rules and guidance concerning the deadline, the consumer communications campaign fee, and PPI complaints and Plevin, would all be made on the same date by the end of December.
The Plevin rules and guidance and the fee rule would come into force around three months later, by the end of March 2017; allowing firms time to prepare for and implement the new provisions.
The rule setting the PPI complaints deadline would then come into force around six months after it was made, by the end of June 2017, with the consumer communications campaign starting at the same time.
The deadline would then fall two years after the deadline rule came into force, by the end of June 2019.