In October 2015, the Financial Conduct Authority published a statement confirming its intention to consult on the introduction of a deadline by which Payment Protection Insurance (“PPI“) mis-selling claims must be brought, accompanied by a consumer communication campaign. Comments on the FCA’s proposals were invited before 26 February 2016.
The FCA has not as yet officially announced whether a PPI deadline is to be implemented. However, The Times reported last week that internal FCA documents have revealed that the FCA is backing a call by the banks for an introduction of a two year cut-off.
In April 2016 alone, £405.8 million was paid out to customers who complained about the sale of a PPI policy to them. Since 2011, a total of £24.2 billion has been paid out to consumers. In light of these figures, and given the length of time that has now passed since PPI “mis-selling” claims began, it is hardly surprising that the banks would like to see the conclusion of this tranche of claims in the near future. Should a deadline be implemented, banks would likely be expected to write to customers directly regarding any possible PPI compensation claim, to enable the customer to take action ahead of the deadline, should they wish to do so.
As discussed in our blog, “Government increases the regulation of Claims Management Companies” (21 March 2016) there were some 1,752 operative claims management companies (“CMCs“) in 2015, which have played a part in driving the wave of PPI mis-selling claims against banks. The CMCs argue that a PPI deadline would deny consumers access to justice, and The Times reported that the CMCs had “threatened to bring a judicial review against the FCA” if a deadline was introduced.
HM Treasury is reported to agree that the time has come for an end to PPI claims.
An official FCA announcement is awaited and should bring clarity for both banks and consumers.