The Financial Conduct Authority (FCA) has today confirmed that it believes that, overall, the package of proposals on payment protection insurance (PPI) complaints laid out in its November 2015 consultation should be taken forward.
This package includes imposing a deadline for making new PPI complaints and launching a consumer communications campaign to raise awareness of the PPI issue and the deadline. The FCA also intends making rules and guidance on handling PPI complaints in light of the Supreme Court judgment in Plevin v Paragon Personal Finance Ltd (Plevin).
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 2015 consultation and relate in particular to three key aspects of the rules and guidance:
- to include profit share in our 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 further feedback and the consultation will close on 11 October 2016.
Andrew Bailey, chief executive of the FCA said: “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. 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 the 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 2016;
- the Plevin rules and guidance and the fee rule would come into force around 3 months later, by the end of March 2017. This is to allow firms time to prepare for and implement the provisions on Plevin;
- the rule setting the PPI complaints deadline would come into force around 6 months after it was made, by the end of June 2017, with the consumer communications campaign starting at the same time. This timing is to allow the FCA to begin the necessary campaign production after the deadline rule is made;
- the deadline would then fall two years after the deadline rule came into force, by the end of June 2019.
The timings above are subject to the feedback received to the further consultation.
Consumers who are unhappy about PPI should continue to complain to the firms concerned and to the Financial Ombudsman Service if they are not satisfied with the response. The FCA statement and related information is available here.