Greg Standing
Autre
Head of Enterprise Risk Management
Article
4
This article originally appeared in Motor Finance magazine in September 2016.
In August, the Financial Conduct Authority (FCA) published its response and a further consultation (CP16/20) on its proposals regarding the handling of Payment Protection Insurance (PPI) mis-selling complaints in light of the Supreme Court decision in Plevin v Paragon Personal Finance Ltd. Its proposals were set out in CP15/39.
Following the feedback on its initial proposals from firms, trade bodies and consumer organisations, the FCA has confirmed its intention, subject to some proposed changes, to implement its earlier proposals. The FCA believes the proposed measures will help bring finality and certainty to PPI claims and enable firms to take a fair and consistent approach.
The FCA's response affirms:
The proposed changes following the feedback, and upon which further feedback is sought relate to three key aspects of its proposals being:
The FCA's proposed rules and guidance will, subject to this further consultation, be published in December 2016 and come into force by the end of March 2017.
The rule setting the PPI complaints deadline will come into force 6 months after it is made, so by the end of June 2017 with the communication campaign starting at the same time. The deadline for submission of PPI mis-selling complaints will expire two years later in June 2019. Consumers who fail to complain by the deadline will lose the right to have the complaint assessed by the firm or the Financial Ombudsman (FOS). The FCA proposes however that, as is currently the case, the FOS can deal with complaints submitted after the deadline if there is exceptional circumstance or the firm agrees to it.
It is expected that the communication campaign will see a rise in the number of complaints submitted, including, potentially, speculative complaints. Firms will need to consider the operational challenges (and financial pressures) that such an increase will impose upon them.
Further feedback and responses to CP16/20 can be submitted until 11 October 2016.
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