Consumers will be urged to "make a decision" about whether to claim compensation for mis-sold payment protection insurance (PPI) as part of a two-year awareness-raising campaign.
The campaign, which is being paid for by the 18 financial firms who reported the majority of mis-selling complaints, will consist of TV, cinema and online advertising and outdoor billboards, running up to the claims deadline of 29 August 2019. The firms are also funding a dedicated FCA phone line which will assist consumers with their PPI queries, and have agreed to put procedures in place to make it easier for customers to make a complaint.
New rules now in force mean that more customers could be entitled to compensation, even if the policy was not mis-sold. Where a provider earned commission of 50% or more on the PPI policy sale, and this was not disclosed to the customer, any commission over this level will have to be repaid.
FCA chief executive Andrew Bailey said that the campaign "aims to cut through the noise on PPI".
"We want to encourage people to decide whether to find out if they had PPI and whether to complain or not," he said. "Our message is 'do it now', and I urge people to make a decision before the deadline on 29 August 2019."
Insurance law expert Colin Read of Pinsent Masons, the law firm behind Out-Law.com, said that firms should be prepared for additional complaints in the run-up to the 2019 deadline.
"Texts, emails, calls and traditional advertising have been deployed by claims management companies seeking new complainants for some years," he said. "Banks and insurers will be watching carefully to see if this publicity campaign – with an 'official' push by the FCA behind it – generates genuinely new complainants, requiring financial institutions to revisit their provisions for PPI claims."
PPI was intended to cover repayments due on loans or credit cards for people who could not afford them due to an accident, unemployment, sickness or death. However, these products were widely mis-sold to customers who in some cases were not told that a policy was optional, or that the policy they were sold did not cover their circumstances.
Over £27.4 billion has been paid out to consumers since the FCA first introduced rules for complaining about PPI in 2011. The new rules, allowing for complaints based on undisclosed commission, have been introduced in response to a 2014 Supreme Court decision, in which it ruled that lender Paragon Personal Finance's failure to disclose a large commission payment on a single premium PPI policy made the relationship between it and its client, Susan Plevin, 'unfair' as defined by the 1974 Consumer Credit Act.
Firms have agreed to write out to consumers whose complaints were originally rejected, but who may now be able to complain as a result of the issues raised by the Plevin decision. Around 1.2 million people could be affected. They have also agreed to provide options for consumers to submit their complaints online and to simplify their complaint forms, to provide additional support to vulnerable consumers who may need extra help to complain and to put free-to-use PPI checking processes in place.
Although August 2019 is the general deadline for PPI complaints, consumers will have less time to make a complaint if the usual statutory limitation period has already started to run.
Claims management company We Fight Any Claim has filed a legal challenge to the FCA's deadline at the Court of Appeal, according to the Financial Times (registration required). The firm, whose request for a judicial review of the policy was dismissed by the High Court, has argued that the FCA has no power to impose a time bar on claims, according to the report.
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