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Banks get extension to deal with backlog

The FSA has agreed a temporary extension for Barclays, Lloyds Banking Group and RBS to handle the huge backlog of payment protection insurance complaints.

Under FSA rules, all complaints must be handled within eight weeks. In October last year, the British Bankers’ Association launched a judicial review into the FSA’s PPI complaint-handling measures.

A number of firms placed their PPI complaints on hold pending the outcome of the case, which went in favour of the FSA in May.

Under the temporary extension, the regulator says PPI claims that have been put on hold during the PPI review must receive a decision by August.

PPI complaints received after the conclusion of the PPI review but made on or before August 31 must be responded to within 16 weeks.

Firms must respond to PPI complaints made between September 1 and December 31 within 12 weeks.

The FSA says the extension has been put in place to ensure firms are able to handle PPI complaints properly.

All complaints received from January 1, 2012 must be dealt with on the eight-week standard basis.

FSA interim managing director of the conduct business unit Margaret Cole says: “Some firms are facing a huge backlog and now a surge of new complaints which has created a bottleneck.”

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