November 20, 2017

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New PPI Complaint Deadline: Beginning of End or the End of Beginning?

As discussed in a previous blog (3 May 2017), consumers seeking compensation in relation to any new payment protection insurance (“PPI“) complaint will now have until 29 August 2019 to complain to the Financial Ombudsman Service about any alleged mis-selling by lenders.

The Financial Conduct Authority (“FCA“) has announced the final deadline in an attempt to draw a line under claims of PPI misselling, claims that have plagued lenders over the last decade. PPI has turned out  to be one of the most expensive issues ever to have hit the UK’s financial sector. Based on FCA figures, since January 2011, a total of £27 billion has been paid out to customers.

Inevitably, lenders will welcome the new deadline which should survive any legal challenges by claims management companies.  But before the corner is turned, lenders might need to galvanise themselves for a potential spike in new PPI complaints and claims from customers (directly and through those claims management companies) over the next two years. This month the FCA will launch its two-year consumer communications campaign with Andrew Bailey, Chief Executive of the FCA saying that “putting in place a deadline and campaign will mean people who were potentially mis-sold PPI will be prompted to take action rather than put it off“.  Mr Bailey may very well be right and certainly the CMCs have not wasted any time in upping their adversting ante.

To cope with any increase in claims, lenders may also need to ensure they have set aside enough funds to deal with any  surge of claims over the next two years. Having already set aside £40 billion to cover claims to date, some lenders may do well to re-evaluate their existing PPI reserve pots.

This is very much the end is in sight. But not quite yet.

© Copyright 2017 Squire Patton Boggs (US) LLP

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About this Author

Garon Anthony, Squire Patton Boggs, commercial litigation lawyer, public sector clients attorney
Partner

Garon is a partner in the Litigation Practice Group. He has specialised in dispute resolution work since he qualified as a solicitor and has considerable experience in general corporate and commercial litigation work, acting for both private and public sector clients.

Garon regularly resolves disputes for clients in the financial services/insurance sector. That encompasses professional negligence, fraud issues/recovery processes, dealing with claims and complaints by customers of the mis-selling of retail products, handling insurance policy...

44 121 222 3507
Mariyam Harunah, Squire Patton, professional negligence lawyer, debt recovery attorney
Associate

Mariyam regularly acts for a diverse client base, including, SMEs, FTSE 100 and 250 corporations, public bodies, developers, insurers and individuals.

Mariyam has experience advising on a wide-range of matters of both a contractual and tortious nature, including breach of contract, breach of warranty, misrepresentation, defamation, professional negligence, debt recovery and insurance.

44 121 222 3175