Is the PPI Deadline 29 August 2019 a Mistake?
Not everyone agrees with the Financial Conduct Authority introducing a PPI compensation deadline of 29 August 2019, Martin Lewis, founder of MoneySavingExpert.com being one of them.
The FCA itself admits that only one in five potential complaints about mis-sold PPI have been made and this, says Lewis, is the reason why a two-year deadline for PPI compensation claims is an error on the part of the FCA.
The banks have set aside £40billion for PPI compensation claims and welcomed the announcement of the deadline.
But consumer groups are outraged.
And the numbers, from the FCA, relating to policies and claims are staggering. It has revealed that between 52 million and 64 million PPI policies were sold to around 30 million customers between 1990 and 2010.
What is unclear, is how many of these policies were mis-sold. But the FCA estimated lower numbers back in 2014.
So far, say the FCA, 13 million genuine PPI complaints have been made with banks footing a bill of £26.2 billion thus far.
And claim management companies are not happy with how the FCA has handled the scandal. The figures requested as part of a Freedom of Information act reveal that 12 million customers received pay out between April 2011 and November 2015, a slightly different figure to that given by the FCA.
One prominent claims adviser has said that the way in which the regulator has handled the PPI debacle is “unlawful, detrimental to tens of millions of consumers, and contrary to the FCA’s statutory objective of protecting consumers”.
Martin Lewis also agrees that the PPI debacle has a long way to go and that imposing a deadline is a mistake. He says that more than half of all cases in the last year that had been rejected by the banks has been overturned by the Financial Ombudsman. In other words, the banks and lenders are still rejecting claims when the customer is entitled to PPI compensation.
Lewis says it is a matter of trust in banks, and in the process of dealing fairly with all claims, examining each on their own merits. But he says, this won’t happen whilst a bank or lender values their balance sheets more than their customers.
The consumer Which? agrees that the PPI compensation claims process has been ‘wholly inadequate’.
But the FCA disagrees. It says the deadline is needed and that the £42 million promotional campaign bill will be paid for by the banks.
The Citizens Advice have concerns but not so much with consumer rights in relation to the high fees and issues with the way PPI was sold but with consumers ‘being swamped by cold calls’ from claim management companies. They also want a limit on how much a claims management company can charge customers.