FCA clarifies fairer treatment of regular premium PPI complaints

The regulator’s proposed guidance deals with an uncertainty that has emerged since the rules were made. The guidance clarifies that firms should assess commission disclosures not only at the point of sale but on an ongoing basis, and that this should be assessed under the FCA’s general complaint handling rule.

In March 2017 the FCA made rules in relation to the Supreme Court judgment in Plevin. That judgment and the rules say that a lender’s failure to disclose at point of sale a large commission payable out of the PPI premium can make the lender’s relationship with the consumer unfair under the Consumer Credit Act.

Jonathan Davidson, executive director of supervision – retail and authorisations at the FCA, said: “This consultation provides guidance on how to ensure fair and consistent outcomes for regular premium PPI complaints. It supports our aim of bringing the PPI issue to an orderly conclusion in a way that secures appropriate protection for consumers and enhances the integrity of the UK financial system.”

The consultation closes on 4 September 2018 and the FCA will consider the feedback received.

If the FCA decide to proceed, it will issue a policy statement with finalised guidance in late autumn 2018, with an immediate implementation date.

Consumers who previously made a complaint about regular premium PPI and had it rejected will be able to make a new complaint to their lender.

Consumers should consider and decide whether they want to make a complaint before the 29 August 2019 deadline.