The Financial Services Authority (FSA) has said it will look at the needs of the consumer when considering an April 2014 deadline for people to lodge payment protection insurance (PPI) mis-selling complaints, as proposed by the British Bankers Association (BBA).
At present, policy holders can either choose a deadline six years from when they were sold the product; or three years from when they first became aware they might have cause to lodge a complaint.
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Banks had hoped to draw an earlier line under the issue, for which they have already set aside an estimated £13bn, by bringing the deadline forward. However the regulator said it would only agree to do so if it was "in the interests of the consumer," which it would gauge by consulting consumer groups, followed possibly by a full public consultation.
The April 2014 deadline was also spoken about at the third annual Frontline Solutions F&I Conference in October 2012 by legal advisor Mark Hollinshead, director of Equity In Finance, who pointed out sales of PPI ended in 2008, meaning the six-year post-sale limit would begin to come into effect in 2014.
The BBA had offered to fund a year-long advertising campaign to raise public awareness over the new deadline from April, however this appeared unlikely to sway opinion, with Which? chief executive Peter Vicary-Smith pointing out there already was a time limit to claims.
"Before even thinking about a new time bar the banks should be proactively contacting their customers and making it as easy as possible for people entitled to a legitimate refund to claim back their money, without any hassle," added Vicary-Smith.
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By GlobalDataPaul Clark, chief executive of complaints management software provider Charter UK, was in favour of a deadline if it encouraged claims to be dealt with promptly but added banks "need to be able to draw a line under the PPI debacle… Our banking industry needs to be freed from the burden of false PPI claims being made by unscrupulous claims management companies."
The Financial Ombudsman Service has recently hired an extra 1,000 staff to deal with rising numbers of claims, which doubled between H2 2011 and H1 2012, whilst the FSA has said it wants to overhaul regulation of commission-based selling, such as the incentivised selling of financial products.
