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FCA extends deadline for PPI to June 2019

The Financial Conduct Authority (FCA) has proposed to extend the deadline for payment protection insurance (PPI) claims to June 2019 from the previous suggestion of summer 2018.04 Aug 2016

The FCA has begun a new consultation on the deadline based on the responses it received to its first PPI consultation paper released in November 2015, it said.

An FCA-led consumer communications campaign would raise awareness of the issue and the deadline, and would be paid for by the 18 firms who receive around 90% of PPI complaints, it said.

The FCA has also asked for specific feedback on proposed new rules and guidance on the handling of PPI complaints related to the Supreme Court's judgment in the so-called Plevin case in November 2014. The proposed changes cover including profit shares in the assessment of fairness and redress, allowing previous rebates to a customer when they cancelled a PPI policy to be reflected in any redress, and clarifying how firms should calculate redress when commission or profit share rates varied during the life of a PPI policy.

Andrew Bailey, chief executive of the FCA said: "Putting a deadline on PPI complaints will bring the issue to an orderly conclusion in a way that protects both consumers and market integrity."

"We have listened to all the feedback we have received and believe that the steps we are taking are the right ones. We will ensure that our communications campaign will engage with all those who could be affected, particularly vulnerable consumers," he said.

Since the number of PPI complaints began rising in 2007, firms have handled over 16.5 million complaints, upheld more than 75% of them and paid in excess of £21 billion in redress to more than 12 million consumers. 

Financial litigation expert Jonathan Cavill of Pinsent Masons, the law firm behind said: "While a number of claims management companies have indicated that they will challenge the FCA in court if the deadline proposals are implemented, there is little doubt the FCA intends to bring the PPI complaints saga to a conclusion, on the condition that it is done in a fair, proportionate and justifiable manner for consumers. While firms are likely to welcome such intervention by the FCA, they need to be aware that it will bring increased complaints and the requirement for alternative reserving structures, which may test their internal complaints handling models."