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PPI payout deadline considered by regulator PPI payout deadline considered by regulator
(35 minutes later)
The financial regulator, the Financial Conduct Authority (FCA) is considering a deadline for claims over mis-sold payment protection insurance (PPI).The financial regulator, the Financial Conduct Authority (FCA) is considering a deadline for claims over mis-sold payment protection insurance (PPI).
Under its proposal, it anticipates that PPI customers would have at least until 2018 to claim compensation. It anticipates that PPI customers would still have at least until 2018 to claim compensation.
The regulator intends to publish more detail about its plan before the end of the year. So far more than £20bn has been paid out for PPI mis-selling to more than 10m consumers.
The FCA cited "increasingly stale" evidence from a high number of customers who are pursuing older cases. The policies were supposed to protect people against loss of income or sickness, but were often inappropriate.
It also said claims management companies are charging customers too much in legal fees. The regulator will now launch a consultation, on whether there should be a deadline on compensation claims.
Bringing a complaint is free for customers, it added, saying that in most cases, people should not have to use a claims management company. It said there should be a window of at least two years after the deadline is set.
The FCA said that for now, customers concerned about being mis-sold PPI should continue to bring their claims to the banks involved and to the Financial Ombudsman Service. This would not be before the Spring of 2016 - meaning that consumers would have until the Spring of 2018 to make a claim.
Shares in Lloyds, the bank most exposed to PPI, jumped by nearly 3% in early trading.
Advertising campaign
The number of complaints about PPI is falling, but still runs in to hundreds of thousands every month.
In the first half of 2015 more than 883,000 customers complained about mis-selling, a fall of 16.6% on the same period in 2014.
The FCA said a deadline would "bring the PPI issue to an orderly conclusion, reducing uncertainty for firms about long-term PPI liabilities and helping rebuild public trust in the retail financial sector."The FCA said a deadline would "bring the PPI issue to an orderly conclusion, reducing uncertainty for firms about long-term PPI liabilities and helping rebuild public trust in the retail financial sector."
The watchdog said too many people were taking too long to bring their claims, and that a deadline - along with an advertising campaign promoting any potential deadlines - would spur any outstanding claims to be brought.The watchdog said too many people were taking too long to bring their claims, and that a deadline - along with an advertising campaign promoting any potential deadlines - would spur any outstanding claims to be brought.
It said that for now, customers concerned about being mis-sold PPI should continue to bring their claims to the banks involved and to the Financial Ombudsman Service.