After years of trying the British banking system has finally got the country’s financial regulator to agree to set a deadline on future PPI claims and now the clock is ticking down towards August 29th 2019.
PPI has grown to be one of the biggest financial scandals ever seen in the UK with £27.7 billion already paid out in compensation for the mis-sold insurance.
Billions more have been set aside by the banks to pay future successful claims, but now the time limit is forcing consumers who think they may have a claim to lodge it before the deadline or lose the right to do so forever.
Announcing its agreement to set the deadline, the Financial Conduct Authority (FCA) said in a statement: “We now consider there is a case for intervening further in relation to PPI and that introducing a deadline for complaining, preceded by a high profile consumer communications campaign with appropriate messaging:
- would prompt many consumers who want to complain, or to check whether they had PPI, but have not yet done so, into action, resulting in them potentially getting redress sooner, and giving some of them the opportunity to pay off costly debt
- may encourage more consumers to complain directly to firms, rather than using and paying CMCs or other paid advocates
- may increase the efficiency of PPI complaints handling, to the benefit of consumers and firms and
- would bring the PPI issue to an orderly conclusion, reducing uncertainty for firms about long-term PPI liabilities and helping rebuild public trust in the retail financial sector”
A £42 million consumer awareness advertising campaign was launched recently with an animatronic Arnie Schwarzenegger demanding that consumers ‘Do It Now!’ and make a decision to claim before time runs out.
But there is a large group of people who have even less time to make their claims and an estimated 3 million have already lost out.
These were people who have already received warning letters from their lender telling them that they may have been mis-sold PPI. The letters advised consumers they had to make a claim within three years of the date of the letter if they wanted their money back. It is believed a further 1.2 million potential claims will run out of time before the end of the year.
A new strand of mis-selling claims created by the 2015 landmark Plevin decision will also be covered by the deadline.
The Plevin case held that a PPI policy might also be mis-sold if the buyer was not made aware of how much of their premiums were being paid in commission.
Former college lecturer Susan Plevin took her lender to court when she discovered that 72% of the money she had paid for her £5,780 PPI premium had gone in commissions to the lender and the broker who dealt with the sale.
The Supreme Court also ruled that claims for policies which had previously been rejected on other grounds could be re-issued if excess commission was paid.
The FCA has since interpreted the court decision to mean that mis-selling occurred if more than 50% of the premium was set aside for commission.
An estimated 12 million people have already received compensation for mis-sold PPI, but experts believe there could be millions more who haven’t yet made a claim.
The FCA have estimated that somewhere between 45 and 60 million PPI policies were sold between 1990 and 2010 and while not all of them will have been mis-sold experts believe millions of consumers will still have a viable claim.
DO IT NOW!
If you think you may have a claim for mis-sold PPI you should be taking Arnie’s advice and ‘Do It Now!’ before time runs out, either from the 2019 deadline or the one which has already been ticking since you received your warning letter.
This post was written by Mark Buckley