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FCA reopens over two million PPI complaints

The FCA has asked firms to review 2.5 million payment protection insurance complaints which may have been unfairly rejected or where consumers may have been paid too little in redress.

Since the regulator started tracking payments in January 2011, £16bn has been paid out in compensation.

The FCA says firms are now improving how they deal with complaints. But it has asked banks, credit card providers and personal loan firms to go back over 2.5 million old complaints from 2012 and 2013 where consumers may not have been fairly treated.

Although 13 million PPI complaints have been brought since 2007, firms are now writing to a further five milllion customers who are at high risk of having been missold PPI but have not yet complained.

FCA chief executive Martin Wheatley says: “Making sure anybody previously missold PPI is treated fairly now, and paid redress where it is due, is an important step in rebuilding trust in financial institutions. In around 2.5 million complaints this was not necessarily the case so, at our request, firms will be looking at these complaints again.”

The Financial Ombudsman Service has received over one million complaints from people unhappy with the response from their provider, about a quarter of all rejected complaints.

Where complaints have been taken to the FOS, seven out of 10 decisions were upheld.

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Comments

There are 9 comments at the moment, we would love to hear your opinion too.

  1. Ah the old PPI, will this gangrenous wound never heal ? more importantly will the FCA ever let it heal, my expectation is they will just keep it open till the maggots have had their fill and till the host is dead !!

  2. Good grief! How much will that cost? Who pays? I hope it is separated out and the banks pay.

    But then with all the costs and fines they have had so far I wonder how much longer it will be before account holders feel the pain? Account charges? Continuing awful interest rates?

    Well as long as the Regulators make a living. Getting through that lot will generate a bonus or two no doubt.

  3. So the regulator is now suggesting that in addition to the mis-selling of PPI the settlement of complaints is also somewhat questionable… will the Banks ever learn? Surely they should keep out of anything to do with insurance or investments, their appalling tracking record surely now speaks for itself. The fines do not appear to work as for a Bank they aren’t punitive enough to stop the behaviour being repeated.

    Its a bit like selling an under-age alcoholic drinks at the bar, being surprised to find them very drunk and obnoxious, escorting them to the door with a telling off.. only for them to return within 24hours, side-stepping the bouncers on the door, never bothering to check a guest list or ID or doing anything to prevent them from re-entering the bar… and expecting something different to happen. In fact from an IFA perspective it often appears that the red carpet is rolled out, party poppers and confetti thrown around as they are welcomed in… again and again….so that alcohol manufacturers can keep selling heavily taxed and overpriced drinks, in the hope that everyone is too distracted or inebriated to realise.

  4. Are these the same banks that the regulator was suggesting should be able regulate their own advisers?

  5. Shock Horror!
    New misselling complaint scandal!
    Of those sold life insurance it is estimated that 90% (my figures!) have not died within the term.
    This means that 100% of those who have not died will be entitled to compensation as they have paid for a policy which they did not need.
    PS also applies to house insurance (not car insurance because it is compulsory) & anything else you dream up.

  6. I doubt this will restore trust, in fact quite the opposite. Presumably at some point someone will ask the question as to what exactly was the government/ B of E/ regulator doing whilst all this mi-selling was going on

  7. Ah but PPI had been taken away from the FCA by all the claims companies, reopening old claims makes sure you keep your job

  8. The biggest scandal here is the regulators failure to manage the processes required to look at the PPI issue and to allow CMC’s free unchecked reign…. perhaps that’s where the bill should land?
    Maybe the claimants the banks paid out due to it being cheaper to pay than to investigate should also be looked into again…. and potentially have to repay if the claims made by the individual were wrong?
    Can of worms anyone?

  9. Chris, two issues. Firstly the regulators didn’t MISmanage the PPI issue. The rules surrounding the sale of PPI were clear, concise and not mis-leading. The banks just completely ignored them and when challenged took the FSA to court!!!

    As for the claimants that were paid out due to it being cheaper – this is just hear say and there is no evidence whatsoever of this happening – however the banks equally disallowed LEGITIMATE claimants the correct amount of redress as they made ‘goodwill and without obligation’ payments, which the FOS weren’t prepared to accept or review.

    What the banks should be looking at are the cases they rejected out of hand, as this is quicker just to reject and hope they dont got to the FOS (only 25% do!).

    And when will we get off this bandwagon that CMC’s started this mis-selling scandal? CMC’s only highlighted the issue – the FSA didn’t – the FOS didn’t – and the banks certainly didn’t!! If you want to open a can of worms ask the FCA to do a past review on ALL PPI sales as they did with pensions, they wont because where are they going to work in the future???!!!

    The issue here is not CMC’s, it is not the FSA/FCA and it certainly isn’t IFA’s, it is the banks and sub prime lenders who didn’t know what they were selling but knew they were making a huge amount of money on each sale!!! Too much money and this hasn’t even scratched the surface and never will.

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