Financial Conduct Authority consults on changes to PPI complaint handling rules

In a statement published on 2 October 2015, the Financial Conduct Authority (FCA) stated that we would consult on introducing a deadline for making payment protection insurance (PPI) complaints, accompanied by a consumer communications campaign, and on new rules and guidance for handling PPI complaints in light of the Supreme Court’s decision in Plevin v Paragon Personal Finance Ltd.

The FCA has now published its consultation paper on the proposals. This consultation paper sets out the full detail of the proposed new rules and guidance, the evidence considered, the reasons for proposing them, and an assessment of their costs and benefits. The consultation paper also outlines the proposed consumer communications campaign and how it is proposed this be funded.  

Those with views on the proposals set out in the consultation paper have three months to respond. Any comments on, or evidence about, the proposals should be sent to the FCA by 26 February 2016.

What should consumers do?

Consumers who are unhappy about PPI should continue to complain to the firms concerned and to the Financial Ombudsman Service if they are not satisfied with the response. Making such complaints is free to consumers and most people should not need to use a claims management company to assist them. Consumers who intend to complain about PPI should do so as soon as possible.

Notes to editors

  1. CP 15/39:Rules and guidance on payment protection insurance complaints.
  2. FCA statement, 2 October 2015: The Financial Conduct Authority’s Statement on payment protection insurance (PPI).
  3. FCA statement, 30 January 2015: The Financial Conduct Authority to gather evidence on how the PPI complaints process is working.
  4. Supreme Court Judgment: Plevin v Paragon Personal Finance Ltd (November 2014). The court ruled that a failure by a lender to disclose to a client at point of sale the large commissions payable out of the PPI premium made the relationship between the lender and the borrower unfair under section 140A of the Consumer Credit Act 1974.
  5. FCA statement, 27 May 2015: Statement on Plevin v Paragon Personal Finance Ltd.
  6. Monthly PPI refunds and compensation statistics.
  7. The proposed deadline would not extend time for those consumers for whom the time limits under our existing rules have already begun to run or passed (for example those consumers who have received letters from firms in the last few years which specified they had three years from receipt in which to complain).
  8. PPI was sold to borrowers alongside credit products. It was meant to help repay some or all of their borrowing if they lost their income for a period (if, for example, they had an accident, became unemployed or sick, or died). The most commonly sold types of PPI were single premium policies on unsecured loans (around 48% of all PPI policies sold), credit card PPI (around 36%), and regular premium policies on loans or mortgages (around 15%).
  9. Find out how to claim for mis-sold PPI.

Information on the FCA

  1. Find out more information about the FCA.
  2. 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).
  3. 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.