The Financial Conduct Authority will introduce a deadline for making new payment protection insurance (PPI) complaints.
The final deadline for making a new PPI complaint will be 29 August 2019 and in the meantime the FCA will run a two-year consumer communications campaign which will be launched in August.
Andrew Bailey, chief executive of the FCA said: “Putting in place a deadline and campaign will mean people who were potentially mis-sold PPI will be prompted to take action rather than put it off.
“We believe that two years is a reasonable time for consumers to decide whether they wish to make a complaint.
“We have carefully considered the feedback we received and we still believe that introducing a deadline for PPI complaints and a communications campaign warning of the deadline will benefit consumers.”
Consumers have until 29 August 2019 at the latest to make their complaint to the Financial Ombudsman Service.
Complaints about PPI policies sold after 29 August 2017 are not subject to the deadline.
The FCA has also made final rules and guidance related to how firms should handle complaints in light of a recent Supreme Court judgment.
In the Plevin v Paragon Personal Finance decision, the court ruled that if a PPI seller did not disclose it had received a large commission from the product provider, the sale was unfair.
The FCA’s approach includes a 50 per cent commission ‘tipping point’ at which firms should presume the failure to disclose commission gave rise to an unfair relationship, and that profit share should be included in firms’ calculation of commission.
Redress will be calculated as the excess commission over the 50 per cent tipping point.
The FCA will also require all firms to write to previously rejected complainants who are eligible to complain in light of Plevin in order to explain the new basis for complaining to them.
Consumers with live PPI policies will now be able to complain after the deadline if they have a future claim on their policy rejected for reasons related to the sale.
The rules surrounding Plevin will come into effect at the same time as the August 2017 deadline rule – not three months before as originally planned.
damian.fantato@ft.com
