FCA to set PPI complaints deadline for June 2019

The Financial Conduct Authority said on Tuesday that is looking to set a June 2019 deadline for payment protection insurance complaints as it attempts to draw a line under the scandal.

The financial regulator said it will consult on changes to the proposed rules before a final decision is made.

The FCA will consider feedback and the consultation will close on 11 October 2016. Rules and guidance concerning the deadline, the consumer communications campaign fee, and PPI, would all be made on the same date by the end of December 2016, the FCA said.

The rules setting the PPI complaints deadline would come into force around six months after it was made, by the end of June 2017, with the consumer communications campaign starting at the same time. This is to allow the FCA time to begin the necessary campaign production after the deadline rule is made.

Consumers would then have two years after the deadline rule came into force to make a complaint.

Chief executive Andrew Bailey said: “Putting a deadline on PPI complaints will bring the issue to an orderly conclusion in a way that protects both consumers and market integrity.

“We have listened to all the feedback we have received and believe that the steps we are taking are the right ones. We will ensure that our communications campaign will engage with all those who could be affected, particularly vulnerable consumers.”

Laith Khalaf, senior analyst at Hargreaves Lansdown, said: "The disappearance of PPI into the rear-view mirror removes a major thorn in the side of the UK banking sector, which has significantly dented reported profits over the years. Lloyds has been at the forefront of the barrage of complaints, having put aside £16 billion since 2011 to cover compensation claims.

"The introduction of a deadline, combined with a public awareness campaign, is likely to lead to a spike in claims in the short term. Banks have already raised their PPI provisions in anticipation of the remaining wave of claims, though they may have to make adjustments if these prove to be insufficient."