The Financial Conduct Authority (FCA) has set 29 August 2019 as the final deadline for consumers to make PPI complaints.

The regulator has been toying with the idea of setting a deadline since at least 2015, including launching a consultation paper on the topic in November of that year.

Andrew Bailey, chief executive at the FCA noted: “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.  We believe that two years is a reasonable time for consumers to decide whether they wish to make a complaint.

“We have carefully considered the feedback we received and we still believe that introducing a deadline for PPI complaints and a communications campaign warning of the deadline will benefit consumers.”

A number of consumer rights groups had been vocal that a deadline could leave some people due compensation unable to complain if they missed the deadline.

To allay these fears, the FCA has committed to a two-year consumer communications campaign, which will be launched in August 2017.

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Plevin vs Paragon

The FCA has also taken account of the Plevin vs Paragon Personal Finance Ltd  case (Plevin) in making its decision.

This referred to a judgement against Paragon Personal Finance in November 2014, when it was found 71.8% of a £5,780 PPI premium was paid as commission to a broker and Paragon, without being disclosed to the customer.

This decision meant customers had new grounds to complain about PPI regarding the amount of money that the providers received for the sale, if the failure to disclose that commission made the relationship unfair.

The FCA said its approach includes a 50% commission ‘tipping point’, at which firms should presume, for handling PPI complaints, that the failure to disclose commission gave rise to an unfair relationship, and that profit share should be included in firms’ calculation of commission.

Redress will be calculated as the excess commission over the 50% tipping point.

In addition, the FCA will require all firms to write to previously rejected complainants who are eligible to complain in light of Plevin in order to explain the new basis for complaining to them.

Consumers with live PPI policies will be able to complain after the deadline if they have a future claim on their policy rejected for reasons related to the sale.  The complaint must be related to the reason the claim was rejected, for example, eligibility, exclusions or limitations.

Complaints about PPI policies sold after 29 August 2017 are not subject to the deadline.

To give firms more time to prepare to implement its approach, and the FCA more time to supervise their preparations, the rules surrounding Plevin will come into effect at the same time as the deadline rule.