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ombudsman news

issue 142

October 2017

PPI: what’s next

On 29 August 2017, the FCA’s new rules and guidance for PPI came into effect – beginning a two-year timeframe for complaining about PPI. Charlie Sweeney, lead ombudsman and director of casework for PPI, explains what this means for the ombudsman service and for people who think they might have a complaint.

what do the FCA’s new rules and guidance mean in practice?

Over the last few years we’ve resolved over 1.5 million complaints about PPI. And although we always look at each case individually, we’ve seen many complaints where the facts and circumstances are pretty similar. So we’ve got a well-defined approach to many of the issues that typically come up. But of course, now we’ll be taking into account something else – levels of commission and profit share in cases affected by the Plevin judgment and the FCA’s rules and guidance.

Another thing that’s changed is that it’s now more urgent for people with concerns about PPI to take action. The FCA’s PPI awareness campaign is designed to help people make an informed decision before the deadline of 29 August 2019. But people’s individual circumstances may mean – for a range of reasons – they need to complain before then. Either way, as Arnie says in the FCA’s ads, it’s best to “do it now”.

Overall, though, the broader responsibilities of those of us involved in PPI haven’t changed. Although there are now more factors to consider when resolving PPI complaints, financial businesses need to treat individual customers fairly. That includes upholding complaints when they should, explaining their answers clearly, and making sure we have all the information we need from them if their customer then comes to us.

And if people are represented by claims management companies – who’ve been heavily involved in PPI throughout – those companies need to show a high standard of professionalism and follow their professional code of conduct. They should make sure any information about their client is presented fully and accurately to the business – and to us – so the complaint can be sorted out as quickly as possible. 

It’s also important that both businesses and claims management companies learn from our ombudsmen’s decisions, to avoid complaints being brought to us unnecessarily. We’ll continue to investigate any individual complaints that are referred to us, resolving them in a fair and reasonable way and as quickly as we can.

what have you seen so far since the campaign kicked off?

It’s still too early to tell what the impact of the FCA’s campaign will be in the long run – but we’re expecting to be very busy in the next two to three years. On average, we’ve been receiving about 4,000 PPI complaints a week since April 2017. And as you’ll see from our latest quarterly snapshot in this ombudsman news, new enquiries and complaints about PPI during July to September were higher by a fifth than in April to June.

We’ve currently got about 200,000 complaints that are waiting for an answer – and 160,000 of these are affected by the Plevin judgment. Our challenge is to make sure we’re geared up to fairly resolve people’s concerns as quickly and efficiently as we can. As we’ve explained in our plans for the year ahead, published in March 2017, we’re aiming to resolve 280,000 PPI complaints by the end of March 2018.

how have you been preparing to do that?

Since the Plevin judgment, there’s been a lot of uncertainty – and a lot of complex issues for the FCA to work through in consulting on and finalising its rules and guidance. Now there’s more clarity about what the FCA expects, the task has been brought into focus for the financial services industry.

It’s meant we’ve been able to move forward the important work we’ve been doing with businesses, so we’ll get the specific information – primarily about the levels of commission and profit share – that we’ll need from them to resolve individual complaints. We’re starting to make good headway in giving answers to people who’ve been waiting to hear from us, and that will continue to be our focus in the months ahead.

In addition to the ongoing operational conversations we have about PPI – whether it’s with businesses, claims managers or the FCA – we’ll shortly be consulting on our plans and budget for the next financial year. Part of this involves speaking to our stakeholders about what they think the future looks like in terms of the numbers of PPI complaints they expect we’ll see.

This will be a key part of our discussions at our upcoming round of Industry Steering Group meetings in November with financial businesses and trade associations – and we’ve also been talking to organisations representing consumers. These conversations are crucial in helping us ensure we’re all on the same page as we work together to put the mass mis-selling of PPI behind us.

Of course, as we work through issues arising from Plevin, it’s also helpful to remind people about how we approach some of those more typical issues I mentioned at the beginning. For example, we know people sometimes have really practical questions about whether they’re able to complain about PPI, and how to go about it.

That’s why we’ve refreshed the information about PPI on our website. And it’s why we’ve taken the opportunity in this ombudsman news to share some of the most common questions we get – so people can confidently take action about PPI if they want to, and resolve their concerns as soon as possible. I hope you find it helpful.

Continued on the next page.

Image: Charlie Sweeney
lead ombudsman and director of casework
Charlie Sweeney
lead ombudsman and director of casework

ombudsman news gives general information on the position at the date of publication. It is not a definitive statement of the law, our approach or our procedure.

The illustrative case studies are based broadly on real-life cases, but are not precedents. Individual cases are decided on their own facts.