The Financial Conduct Authority (FCA) has published CP16/20: Rules and guidance on payment protection insurance complaints: feedback on CP15/39 and further consultation.
In this latest consultation, the FCA confirms that it intends to proceed with the approach first proposed in CP15/39 which will introduce a deadline for new PPI mis-selling claims and make additional rules and guidance in its DISP sourcebook to reflect the Supreme Court decision in Plevin v Paragon Finance.
Reponses to CP16/20 are invited by 11 October 2016. If the consultation proposals go ahead, the deadline for the submission of new PPI complaints is likely to fall at the end of June 2019.
What does the FCA propose in CP16/20?
The FCA proposes various changes to the approach to PPI set out in CP15/36. In particular, it proposes to:
- include profit share sums in addition to commission amounts in any calculation of PPI owed in relation to a Consumer Credit Agreement (ie a Plevin-style complaint);
- clarify the approach to redress where commission, and profit share, vary during the life of the PPI policy; and
- specify that sums rebated to a consumer when they cancelled a single premium PPI policy early can be included (and therefore reduce) the calculated amount owed in redress.
The original measures proposed in CP15/39 to:
- run a communication campaign designed to inform consumers of the deadline for complaints;
- introduce a new fee-rule imposed on 18 firms to fund the communication campaign; and
- introduce rules and guidance on Plevin cases;
The likely outcome
The FCA acknowledges that the communication campaign and deadline are likely to lead to a rise in the submission of complaints with a resulting increase in work for distributors of PPI. Where firms have delayed their response to Plevin-style claim,s the FCA reminds them that once the rules are finalised complaints that have been on hold should be met with a fair, swift and final response.