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Claims firms should expect a bottleneck ahead of PPI deadline

Hourglass-Deadline-Time-Clock-700.jpgFirms processing payment protection insurance complaints need robust capacity to handle a potential late onslaught of clients, according to consultancy Huntswood.

Managing director Steve Kitchen says this will also include added pressure from the FCA and Financial Services Ombudsman.

He says: “They will be keeping a very close eye on how firms deal with their customers. Great work has been done by firms to get this far with their heads still above water, but now more than ever there needs to be a game plan to get over the line.”

This comes after the FCA’s second opportunity for complaints ahead of the 29 August deadline.

The FCA proposed around 150,000 PPI complaints previously rejected can be reviewed again if people make a new complaint about non-disclosure of commission.

The current PPI framework was put into place last year after the after the Plevin v Paragon Personal Finance Ltd decision in the Supreme Court.

Now, the regulator says firms should be assessing commission disclosures on an on-going basis not just at point of sale.

FCA proposes rejected PPI complaints be revisited

Kitchen says firms will need to ensure technology is up to scratch in case people are late.

“Everything from connectivity to back-up to security” he adds.

“As with any business continuity planning, securing warm stand-by sites is critical, so that, should service levels begin to suffer during a surge, firms will be able to quickly increase their capacity.”

The August deadline will only bar new complaints and could cause a bottleneck for providers.

Kitchen says: “A surge could be extremely disruptive to firms that have made the call to wind-down operational capacity in order to return to business-as-usual level complaints. Hundreds of complaints could be filed on the day of the deadline and they will all have to be processed and treated just as all previous PPI cases.”

The FCA ramped up its publicity campaign around PPI last year and is using former Governor of California Arnold Schwarzenegger as its face.

Close to four million inquiries had been made up to November last year through both claims management firms and by direct contact between complainants and the regulator.

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