The FSA has agreed a temporary extension for Barclays, Lloyds Banking Group and RBS to handle the backlog of payment protection insurance complaints.
Under new FSA rules all PPI must be handled within eight weeks. The extension has been put in place to ensure firms are able to handle the complaints properly.
The FSA says that PPI claims still with the firm but put on hold during the PPI review will receive a decision by August. PPI complaints received after the conclusion of the PPI review but made on or before August 31 will be responded to within 16 weeks and PPI complaints made between September 1 and December 31, 2011 will be responded to within 12 weeks.
As part of the extension, the FSA has called for all PPI complainants and their customers to be fully informed and for the banks to provide the FSA with regular reports on compliance. The FSA says all complaints will be dealt with on the eight week standard basis from January 1, 2012.
A number of firms placed PPI complaints on hold after the British Bankers’ Association launched a judicial review into the FSA’s new complaints handling measures. The FSA and the Financial Ombudsman Service won the case on May 9, 2011.
FSA interim managing director of the conduct business unit Margaret Cole says: “We want to see all PPI claims for compensation dealt with swiftly and appropriately. However some firms are facing a huge backlog and now a surge of new complaints which has created a bottleneck. It is not in the interests of consumers to receive further poor handling of their complaints as a result. This temporary extension means that these firms can process these complaints properly and fairly.
“We will be monitoring their progress carefully to ensure the new deadlines are met, that complaints are dealt with as promptly as possible and the backlog is cleared as a matter of urgency.
FOS chief executive Natalie Ceeney says: “The FSA has set down a clear timetable for these businesses to deal with complaints. We trust that the businesses involved will use this time to ensure that they have the necessary resources in place to deal with the PPI complaints they’ve received fairly and promptly.”