The UK FCA recently announced plans to issue a consultation paper before the end of 2015 in which it will make a number of proposals in relation to Payment Protection Insurance (PPI).

As a result of recent investigations, the FCA has identified a need to draw the potentially open-ended nature of the PPI misselling scandal to a close and tackle the problem of consumers failing to raise complaints in a timely manner. Its consultation will contain proposals on: (i) the implementation of a “longstop” date by which point consumers must have brought PPI claims which will be at least two years following the imposition of the proposed rule and, consequently, will not come into force before Spring 2018; and (ii) the launch of an FCA advertising campaign to encourage consumers to raise complaints ahead of the deadline and deal directly with firms (rather than claims management companies, who charge a fee for their services) instead.

In light of the English Supreme Court’s ruling in Plevin v Paragon Personal Finance Ltd [2014] UKSC 61 the consultation will also contain proposals that any failure  to disclose commission of 50% or more on the sale of PPI will give rise to an “unfair relationship” under s.140A of the Consumer Credit Act and it plans to consult on circumstances when this rule should not apply. The consultation will also look at requirements on firms to pay redress in these circumstances and include the FCA’s cost benefit analysis of the proposed changes. Importantly, the FCA’s proposals only apply to PPI products and, if implemented, would not require providers to proactively review previously rejected complaints.

The FCA indicated its position as set out in the 2 October statement is subject to change and we await the publication of the consultation to understand its final proposals in this regard.