FCA rule change on PPI could prompt fresh wave of bank payouts
Banks could see a fresh wave of compensation claims after the Financial Conduct Authority said it was considering making firms contact customers who have had previous PPI complaints dismissed.
Under the FCA’s proposals, firms would need to write to around 150,000 consumers to tell them that they could make a new complaint about non-disclosure of commission received from payment protection insurance premiums.
The City watchdog, which has launched a month-long consultation on the proposal, would also insist firms remind consumers of the 29 August 2019 deadline to file complaints by.
The FCA has also sought to end uncertainly around a key PPI ruling, known as Plevin, by clarifying that firms should assess commission disclosures “not only at the point of sale but on an ongoing basis, and that this should be assessed under the FCA’s general handling rule”.
So far banks have paid out around £30bn because of mis-sold PPI.
Jonathan Davidson, the FCA’s executive director of supervision, retail and authorisations, said: “The final guidance resolves an area of uncertainly 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.
“Together these measures support the good progress we are making toward bringing the PPI issue to an ordering conclusion.”