The Financial Conduct Authority is proposing new rules for payment protection insurance (PPI) claims requiring firms to write to some 150,000 consumers who had previously complained unsuccessfully to tell them they can make a new complaint.
These letters should also remind claimants of the two-year deadline for PPI complaints the FCA introduced last year, which has been set for 29 August 2019.
The new rules come after a Supreme Court judgement last year ruled a lender’s failure to disclose at point of sale that a large commission was payable out of the PPI premium could make the lender’s relationship with the consumer unfair under the Consumer Credit Act.
Jonathan Davidson, executive director of supervision for retail and authorisations at the FCA, said: "The proposed mailings will help certain consumers who have previously complained about regular premium PPI but been rejected to engage with our campaign and consider whether they want to make a new complaint about undisclosed commission before the deadline.
"Together, these measures support the good progress we are making toward bringing the PPI issue to an orderly conclusion in a way that secures appropriate protection for consumers."
Figures released yesterday by the Financial Ombudsman Service showed payment protection insurance was the product which generated the most complaints, with 43,326 new cases in the second quarter alone, accounting for 44 per cent of all complaints.
The FCA's guidance clarifies that firms should assess commission disclosures not only at the point of sale but on an on-going basis, and that this should be assessed under the FCA’s general complaint handling rule.
Mr Davidson said: "The final guidance resolves an area of uncertainty and will ensure fair and consistent outcomes for regular premium PPI complaints."
Consumer rights group Which has previously questioned the FCA's approach to the mis-selling scandal, which allows banks to sit back and not proactively contact customers, relying instead on people knowing whether they had PPI and making a claim.
Gareth Shaw, money expert at Which, said: "Firms have admitted that they are doing the bare minimum to compensate victims by failing to investigate and flag all the policies a claimant might have held, meaning millions could be left unclaimed."
He added that as the deadline to claim approaches, Which was encouraging anyone may have additional policies to make additional claims, even if they’ve already had a successful payout on one policy.
The consultation on mailing requirements closes on 7 December 2018 and if the FCA decides to proceed, it will aim to issue a policy statement with final rules in late January 2019, with the mailings then to be completed by 29 April 2019.
Venilia Batista Amorim is a freelance writer for FTAdviser