A deadline for people to reclaim mis-sold Payment Protection Insurance (PPI) could soon be in place under plans being considered by the financial regulator.
The Financial Conduct Authority (FCA) is considering a deadline of spring 2018 for people to issue a claim.
But consumer groups are concerned that customers who have been mis-sold PPI could still be left out of pocket.
Which? Executive director Richard Lloyd and Money Saving Expert’s Martin Lewis stated in an open letter to the FCA earlier this year that such a move ‘would be to the detriment of consumers’.
Richard Lloyd said: ‘Efforts must be redoubled to ensure that anyone mis-sold PPI is given fair, speedy compensation so that people get back what they’re rightly owed.’
The total amount now set aside by the big five banks for PPI compensation is around £26.7bn. People wishing to reclaim mis-sold PPI should do so before spring 2018 or lose the opportunity for good.
Which? has helped more than 60,000 people issue a PPI compensation claim with our free PPI claim tool and template letters on our Consumer Rights website.
What does the PPI deadline mean?
Following the announcement by the FCA of a time limit, Richard Lloyd added: ‘It’s been clear for years that banks should be working much harder to resolve PPI claims fairly.
‘A time limit must not reward those that have dragged their heels over paying out compensation. If a time bar is introduced, the FCA must make sure all banks carry out a complete review of their PPI handling.’
While PPI-related complaints remain the biggest source of grumbling among bank customers, they’re down 17% in the first six months of the year compared with the same period in 2014, according to FCA data.
But the imposition of this deadline may prompt many more bank customers to check whether they’re entitled to claim PPI compensation.
What is PPI?
The controversial insurance policies were designed to cover debt repayments should you lose your job or become too ill to work.
However, it was mis-sold to millions of people who either had no idea what they were buying or had little chance of making a successful claim, earning banks a fortune.
Claims companies, which have made a profit by helping people reclaim PPI even though it’s easily done online, will no doubt be the big losers from this deadline.