FCA makes final PPI complaint rules

FCA has published a policy statement on PPI complaints, setting out feedback on its consultation paper and final rules and guidance. Alongside this, FCA published an information sheet outlining the new basis for making a PPI complaint and updated its webpage on how to claim back money on the sale of PPI. The consultation, which started in late 2015, has been controversial.

Key features of the policy statement include:

  • a new rule, coming into force on 29 August that sets a deadline of 29 August 2019 for consumers to complain about the way they were sold PPI – although for some consumers the existing time limits may mean they have already run out of time or will soon do so.  Complaints about rejected claims on live PPI policies will not be subject to the deadline, if the claims were rejected for reasons connected to the sale, such as ineligibility or exclusions ;
  • an FCA-led consumer communications campaign designed to inform consumers of the deadline;
  • a new fee rule on 18 firms to fund this consumer communications campaign. This rule will come into force on 31 March 2017, with the first half of the fee being collected in April 2017. These are firms that reported over 1000,000 PPI complaints in a set period. FCA will write to each relevant firm setting out what it owes ; and
  • new rules and guidance on the handling of PPI complaints in light of the Supreme Court’s decision in Plevin v Paragon Personal Finance Limited. The decision in this case means that consumers may have the grounds to complain about PPI regarding the amount of money that the providers received from the sale, if the failure to disclose that commission made the relationship unfair under the CCA 1974. Any commission over 50% will be deemed unfair if it was not disclosed. FCA made some changes to its original proposals following the feedback to its consultation, including introducing a requirement that firms must write to all previously rejected PPI complainants who may be able to make a further complaint as a result of Plevin.