CONSUMERS will have until June 2019 to claim compensation for payment protection insurance mis-selling under proposals outlined by the City watchdog.
The Financial Conduct Authority (FCA) confirmed plans to launch a marketing campaign from next June, which will be funded by Britain’s banks, to raise awareness of the 2019 deadline for claims to be submitted.
It will see a line drawn under the payment protection insurance (PPI) scandal, which has been the costliest yet for the financial services industry, with the total bill now running at a mammoth £24 billion.
The deadline could spark a fresh wave of consumers seeking compensation for mis-sold policies, and is likely to be fuelled by a new round of unsolicited phone calls from “independent agencies” offering to chase payments. Such calls were listed among Britons’ top annoyances in a recent survey.
How can you make a claim?
Firstly, people may be wondering whether they had PPI. Payment protection insurance was designed to help consumers keep up payments on financial arrangements such as loans, mortgages or credit cards if they were hit by a life event such as an illness, an accident or unemployment.
But in many cases these policies were pushed on people without them wanting or needing them, or they may have simply been added without the consumer realising it. In some cases, the policies were not explained properly and people may have wrongly believed the insurance was compulsory in order for them to take out a particular financial product.
According to Which? nearly a third of all complaints made to banks about PPI are being brought by claims management companies (CMCs) on behalf of consumers, who charge a fee of up to a third of the compensation offered. Yet people can make a claim themselves free of charge.
If you think you have been mis-sold PPI, it could be worth gathering together any documents, such as statements with card numbers on or anything with any evidence you had PPI, which could help to back up your claim. However, paperwork may not always be needed if you no longer have it.
Consumers should normally get in touch in the first instance with the business which sold them the policy. This might be the bank or building society where they took out a loan, mortgage or credit card that the policy covered.
They also have the option of taking their complaint to the Financial Ombudsman Service (FOS), if they cannot come to an agreement with the firm they have made the complaint to.
There are several places online where people can find help to get started when making a PPI complaint. For example, Which? has a free PPI tool at www.which.co.uk/consumer-rights/advice/how-to-reclaim-mis-sold-ppi while MoneySavingExpert.com offers help in making a claim at www.moneysavingexpert.com/reclaim/ppi-loan-insurance#letmain.
If you are not sure who your loan or credit card was with, the MoneySavingExpert website suggests checking your credit report could be an option, as this would list any debts that existed within the last six years, even if they have now been paid off.
The Ombudsman Service also encourages people to get in touch with it if they are not sure which company is involved. The service can help direct your complaint to the right person at the company, so that they can look into it first of all.
The Ombudsman Service’s website also offers help with making a complaint at www.financial-ombudsman.org.uk/consumer/complaints.htm.
Once you have complained to a business, they have up to eight weeks to give you an answer. If you are not happy with the response, or you hear nothing back, you can take the complaint to the financial ombudsman.
The ombudsman’s job is to help sort out individual disputes. Its findings depend on the circumstances of each individual case - not on any general findings by regulators.
Many complaints the ombudsman sees hang on what the small print of the PPI policy says and means. The service says it does not matter if the consumer is not sure about what the small print means. The service can help cut through any jargon to decide whether the business acted fairly and lawfully.