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The Financial Conduct Authority has followed through on plans to set a cut-off point for complaints over PPI payment protection insurance policies – the source of £35bn in fines to UK banks and a wave of nuisance calls over compensation claims.
By giving a cut-off, Andrew Bailey, FCA chief executive, said “people who were potentially mis-sold PPI will be prompted to take action rather than put it off.”
Following a ruling in a supreme court, the FCA also outlined new grounds for consumers to complain, stipulating that where financial providers failed to disclose the commission rates, redress for consumers will now be calculated as the excess commission over a 50 per cent tipping point.
The FCA also requires all firms to write to those who have had their complaints rejected to explain the new conditions.
In addition, consumers with current PPI policies will be able to complain after the deadline if they have a future claim on their policy rejected on grounds of “eligibility, exclusions or limitations”.
The Competition and Markets Authority in January said Lloyds had failed to send annual statements to hundreds of customers with PPI policies over the past five years. In some case, the state-backed lender had included incorrect information in their annual statements and had overcharged more than 200 customers on premiums.
Lloyds, which as the UK’s largest lender has sold more PPI than other banks, and has set aside about £17bn for customer redress.