FCA clarifies fairer treatment of regular premium PPI complaints

  • The Financial Conduct Authority (FCA) has today issued a consultation paper on new guidance about the handling of certain regular premium payment protection insurance (PPI) complaints.
  • The proposed guidance clarifies FCA expectations.

In March 2017 the FCA made rules in relation to the Supreme Court judgment in Plevin. That judgment and the rules say that a lender’s failure to disclose at point of sale a large commission payable out of the PPI premium can make the lender’s relationship with the consumer unfair under the Consumer Credit Act.   

The FCA’s proposed guidance deals with an uncertainty that has emerged since the rules were made. The guidance clarifies that firms should assess commission disclosures not only at the point of sale but on an on-going basis, and that this should be assessed under our general complaint handling rule.

Jonathan Davidson, Executive Director of Supervision – Retail and Authorisations at the FCA said:

“This consultation provides guidance on how to ensure fair and consistent outcomes for regular premium PPI complaints. It supports our aim of bringing the PPI issue to an orderly conclusion in a way that secures appropriate protection for consumers and enhances the integrity of the UK financial system.” 

The consultation closes on 4 September 2018 and FCA will consider the feedback received.

If the FCA decide to proceed, it will issue a policy statement with finalised guidance in late autumn 2018, with an immediate implementation date.

What should consumers do?

Consumers who previously made a complaint about regular premium PPI and had it rejected will be able to make a new complaint to their lender.

Consumers should consider and decide whether they want to make a complaint before the 29 August 2019 deadline.

Notes for editors

  1. CP18/18: Guidance on regular premium PPI complaints and recurring non-disclosure of commission
  2. The FCA’s announcement today has no relation to the outcome of recent court cases.
  3. PS17/3 final rules and guidance on Plevin
  4. On 1 April 2013 the FCA became responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority (PRA).
  5. The FCA has an overarching strategic objective of ensuring the relevant markets function well. To support this it has three operational objectives: to secure an appropriate degree of protection for consumers; to protect and enhance the integrity of the UK financial system; and to promote effective competition in the interests of consumers.
  6. Find out more information about the FCA.