The Financial Conduct Authority (FCA) has published a consultation paper proposing new guidance on how certain payment protection insurance (PPI) complaints should be handled.
The guidance follows on from new rules set up by the FCA in March 2017 in the wake of a Supreme Court judgment in the case of Plevin v Paragon Personal Finance Ltd.
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 on regular premium PPI, where a premium is paid on a regular basis – monthly, for example. The guidance clarifies that firms should assess disclosures about commission not only at the point of sale but on an ongoing basis.
Jonathan Davidson, executive director of supervision in the FCA’s retail and authorisations division, says: “This consultation provides guidance on how to ensure fair and consistent outcomes for regular premium PPI [where a premium is paid on a regular basis] 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, after which the FCA will consider the response. If it decides to go ahead with the guidance, it will be finalised and implemented in late autumn 2018.
How will this affect consumers?
The FCA’s proposed guidance makes it more likely that a consumer may have a complaint about regular premium PPI upheld, even if this was sold to them a long time ago (for example, before 6 April 2007). Consumers will need to decide whether they want to make a complaint before the 29 August 2019 deadline about regular premium PPI, or any other kind of PPI.
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 now, but their claim may be delayed until the outcome of the consultation if it relates to regular premium complaints. Remember that any PPI claim must be made before 29 August 2019.
To find out more about PPI and how to complain or check for PPI, consumers can visit Fca.org.uk/ppi/ppi-explained.