FCA clarifies fairer treatment of regular premium PPI complaints and proposes new mailing requirements

The Financial Conduct Authority (FCA) has today issued final guidance that clarifies its expectations about the handling of certain regular premium payment protection insurance (PPI) complaints. The FCA is also proposing new rules requiring firms to write to around 150,000 consumers who had previously complained unsuccessfully to tell them they can make a new complaint and remind them of the deadline.

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

The FCA’s final guidance deals with an uncertainty that emerged since its Plevin framework was put in place. 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 the FCA’s general complaint handling rule.

The FCA is also consulting for one month on related new rules that would require firms to write to around 150,000 specific PPI complainants whom they previously rejected, to tell them that they can make a new complaint about non-disclosure of commission, and remind them of our 29 August 2019 deadline for complaining.

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

“The final guidance resolves an area of uncertainty and will ensure fair and consistent outcomes for regular premium PPI complaints.

The proposed mailings will help certain consumers who have previously complained about regular premium PPI but been rejected to engage with our campaign and consider whether they want to make a new complaint about undisclosed commission before the deadline.

Together, these measures support the good progress we are making toward bringing the PPI issue to an orderly conclusion in a way that secures appropriate protection for consumers.” 

The consultation on mailing requirements closes on 7 December 2018 and FCA will consider the feedback received.

If the FCA decides to proceed, it will aim to issue a policy statement with finalised rules in late January 2019, with the mailings then to be completed by 29 April 2019.

What should consumers do?

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

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

Notes to editors 

  1. CP18/33: Regular premium PPI complaints and recurring non-disclosure of commission – feedback on CP18/18, final guidance, and consultation on proposed mailing requirements
  2. CP18/18: Guidance on regular premium PPI complaints and recurring non-disclosure of commission
  3. PS17/3 final rules and guidance on Plevin
  4. FCA publishes PPI complaints deadline Progress Report
  5. On the 1 April 2013 the Financial Conduct Authority (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).
  6. 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.
  7. You can find more information about the FCA.