People seeking compensation over mis-sold payment protection insurance (PPI) will have to make their claims before 29 August 2019.
The final deadline has been set by the Financial Conduct Authority (FCA) in an effort to draw a line under one of the banking industry’s biggest scandals. Millions of people have already been compensated and banks have set aside more than £40bn to cover the payouts. This includes staffing costs and consumer compensation.
The FCA will run a two-year public awareness campaign, starting in August this year, in an attempt to flush out the remaining complainants. This will be paid for by the banks. Many consumer groups feel that the banks are getting off lightly and it’s hard to disagree with that. Since 2010, the FCA estimates that some £26 billion has been paid in compensation. However, many industry experts feel that as much as double that figure could yet be unclaimed.
The Beat the Banks team have collectively more than 300 years experience in the banking industry. From the sheer volume of PPI sales driven through the banking network alone, we believe the amount unclaimed could be closer to £100 billion to include the premiums paid, interest thereon, plus simple interest at 8% per annum.
Worryingly, banks have now adopted very aggressive tactics when defending claims for the mis-selling of PPI, this despite many of them having been previously fined by the FCA for similar behaviour. Beat the Banks continually report these behaviours and breaches to the Regulator, as we look to bring these lenders to account. We are also Executive Committee members of the Alliance of Claims Companies, that has been established, not only to raise the standards within the claims industry but equally, to open an important dialogue with the major banks and the various regulators.
Interestingly one of the largest claims companies in the U.K. and a founding member of the ACC, has announced it’s legal intention to take the FCA to a Judicial Review over its decision to announce an end date. Their argument as much as anything is how can you put an end date on a crime. If will be very interesting to see how the case progresses.
Another important point to note regarding the end date is that this also includes what is known as, “Plevin,” or “Section 140 Claims.” Traditional PPI claiming is all about the process of how this type of insurance was sold and whether in doing so, it breached either of FCA regulation or the GISC or ABI codes. These new claims are a quite separate matter and relate to the fact that the profit in a PPI sale, may have breached a “fair commission.”
The FCA will give final guidance on this in August 2017, but it seems as though they have settled on 50% as being “fair.” Quite staggering. Claims, however, will only be possible on new borrowing taken with PPI after 5 April 2008, or historic contracts still in place at that date, irrespective as to whether the PPI on the borrowing had been previously cancelled. Importantly this will include traditional claims rejected by a lender and or FOS.