FCA announces PPI deadline and final rules for firms

"Putting in place a deadline and campaign will mean people who were potentially mis-sold PPI will be prompted to take action rather than put it off."

The deadline will be 29 August 2019 and the FCA will run a two-year consumer communications campaign from August 2017.

The regulator has also made final rules and guidance related to how firms should handle complaints in light of the Supreme Court judgment in Plevin v Paragon Personal Finance Ltd.

The Plevin decision means that consumers may have new grounds to complain about PPI regarding the amount of money that the providers received for the sale if the failure to disclose that commission made the relationship unfair.

As proposed, the FCA’s approach includes a 50% commission ‘tipping point’ at which firms should presume, for handling PPI complaints, that the failure to disclose commission gave rise to an unfair relationship, and that profit share should be included in firms’ calculation of commission.

Redress will be calculated as the excess commission over the 50% tipping point.

The FCA will also require all firms to write to previously rejected complainants who are eligible to complain in light of Plevin in order to explain the new basis for complaining to them.

Consumers with live PPI policies will now be able to complain after the deadline if they have a future claim on their policy rejected for reasons related to the sale.

Complaints about PPI policies sold after 29 August 2017 will not subject to the deadline.

To give firms more time to prepare to implement our approach, and the FCA more time to supervise their preparations, the rules surrounding Plevin will come into effect at the same time as the deadline rule – not three months before as originally planned.

Andrew Bailey, Chief Executive of the FCA, said: “Putting in place a deadline and campaign will mean people who were potentially mis-sold PPI will be prompted to take action rather than put it off. We believe that two years is a reasonable time for consumers to decide whether they wish to make a complaint.

“We have carefully considered the feedback we received and we still believe that introducing a deadline for PPI complaints and a communications campaign warning of the deadline will benefit consumers.”