FCA sets out plans for PPI claims deadline

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The FCA plans to set a deadline for consumers to make complaints about missold payment protection insurance.

Once the deadline has passed, consumers will lose their right to have PPI complaints reviewed by firms or referred to the Financial Ombudsman Service.

The FCA says it wants to consult with the industry before setting the deadline, which would fall two years after the rule changes come into force.

The regulator says the rules are not likely to come in before spring 2016, in which case consumers would have until at least spring 2018 to complain.

To date over £20bn has been paid in redress to customers missold PPI.

The FCA has raised concerns about the volume and proportion of PPI complaints being submitted via claims management firms.

It says many complaints relate to pre-2005 and pre-2000 cases where records have gaps and oral evidence is not robust.

The regulator also says the fact that complaints can be made an open-ended basis means consumers who intended to claim have not yet got around to doing so.

The FCA will consult on setting a PPI complaints deadline by the end of the year.

It will also consult on how firms should handle PPI complaints following a Supreme Court judgement in November which ruled that Paragon Personal Finance should have disclosed the large commission it received from selling a single premium PPI policy.

The FCA says: “The consultation paper will include full details of the various proposed rules and guidance, the evidence we have assessed, our reasons for proposing them, and our assessment of their costs and benefits.

“We will continue to monitor firms’ handling of PPI complaints under our current rules.  We expect firms to deal with PPI complaints promptly and fairly. We will take action where firms fail to do so.”