Banks pushing for PPI claims deadline
Unsurprisingly, it is the banks pushing for the move, through the guise of the British Bankers' Association. Even though estimates only put compensation payouts so far at £13 billion, half the figure total liability is expected to be, the banks are keen to draw a curtain over the whole debacle.
Any such time limit would be bad news for possible victims of PPI mis-selling, who may find themselves caught out by a change in the claims rules.
According to the Times, the possible deadline being discussed is summer 2014.
A spokesperson for the FSA says: "As you would expect for an issue of this scale and complexity, we have considered a number of options and continue to do so. PPI is an ongoing and high-profile issue and we are monitoring it closely."
Meanwhile, the Financial Ombudsman Service expects to deal with a record 245,000 PPI cases in the 2013/14 financial year, accounting for two-thirds of its anticipated workload.
Payment protection insurance is designed to cover you should you fall ill, have an accident or lose your job and can’t make repayments on loans or credit cards. However, research by consumer watchdogs found the cover to be overpriced, filled with exclusions (policies exclude self-employment, contract employees and pre-existing medical conditions) and were often mis-sold because the exclusions were never fully explained. In May 2011, the High Court ruled banks had knowingly mis-sold PPI and ordered them to compensate around two million consumers.
The practice of a dishonest salesperson misrepresenting or misleading an investor about the characteristics of a product or service. For example, selling a person with no dependants a whole-of-life policy. There have been notable mis-selling scandals in the past, including endowment policies tied to mortgages, employees persuaded to leave final salary pensions in favour of money purchase pensions (which paid large commissions to salespeople) and payment protection insurance. There is no legal definition of mis-selling; rather the Financial Services Authority (FSA) issues clarifying guidelines and hopes companies comply with them.
The Financial Services Authority is an independent non-governmental body, given a wide range of rule-making, investigatory and enforcement powers in order to meet its four statutory objectives: market confidence (maintaining confidence in the UK financial system), financial stability, consumer protection and the reduction of financial crime. The FSA receives no government funding and is funded entirely by the firms it regulates, but is accountable to the Treasury and, ultimately, parliament.
If you’ve have a complaint about a financial service product you have bought but the company you bought it from refuses to resolve your problem after eight weeks, the Ombudsman can help. The Ombudsman will investigate and resolve the matter. The Ombudsman is independent and its service is free to consumers. The Ombudsman may find in the company’s favour but consumers don’t have accept its decision and are always free to go to court instead. But if they do accept an Ombudsman’s decision, it is binding both on them and on the business.