On 2 October 2015, the FCA issued a Statement announcing that it has decided to consult, by the end of the year, on introducing a deadline by which PPI consumers would need to make complaints or else forgo their right to have their PPI assessed by firms or the Financial Ombudsman Service (the Ombudsman).
The FCA has also decided to consult on rules and guidance about how firms should handle PPI complaints fairly in light of the 2014 Supreme Court decision in Plevin v Paragon Personal Finance Ltd. This concerned a claim under section 140A of the Consumer Credit Act 1974 arising from the non-disclosure of the level of commission on a PPI contract. The proposed rules would introduce a presumption that a failure to disclose a 50% (or more) commission would give rise to an unfair relationship under s140A CCA. Key elements of the redress calculation will form part of the proposed rules.
The FCA considers that the proposed rules and guidance would curtail uncertainty and allow firms to continue to take a fair and consistent approach to handling PPI complaints, whilst enabling the FCA to act more easily if it has concerns that firms are not handling PPI complaints appropriately.
The FCA does not propose “to require (or otherwise expect) firms to proactively review PPI sales falling within the scope of s.140A CCA or to proactively review against the new rules and guidance previously rejected PPI complaints.”