FCA could impose time limits on PPI claims as part of review

The UK's financial services regulator expects to report in the summer on whether the industry's current approach to PPI is meeting its consumer protection and market integrity objectives. Possible outcomes could include a consumer communication campaign or other rule changes, as well as time limits; or continuing the scheme in its current form if it is found to be working well.

PPI was intended to cover repayments due on loans or credit cards for people who could not afford them because of an accident, sickness or death. Since January 2011, firms have paid £17.3 billion in compensation to consumers who were mis-sold the policies, perhaps because they were not told that PPI was optional or that it would not cover their circumstances. Firms have upheld over 70% of the over 14 million consumer complaints they have received in relation to PPI.

Last August, the FCA announced that banks, credit card providers and personal loan companies would reopen 2.5 million PPI complaints first assessed in 2012 and 2013 due to concerns that some customers were unfairly rejected for compensation, or did not receive the amount that they were entitled to. However, at the time FCA chief executive Martin Wheatley said that redress schemes were now working well.

Firms have been urged to continue to deal with PPI complaints as normal until the FCA completes its review. Consumers who believe they were mis-sold the products should continue to complain to the firms that sold it to them and to the Financial Ombudsman Service (FOS) if not satisfied with the response, the FCA said.