UK banks could be forced to write to around 150,000 customers who may have been mis-sold payment protection insurance (PPI) as next year’s deadline to claim compensation looms.
The Financial Conduct Authority said it is proposing the new rules so that customers who have complained unsuccessfully will know they have a second chance.
Customers will be told they can make new complaints if commissions were not disclosed, ahead of the 29 August 2019 deadline.
Jonathan Davidson, a director at the FCA said: “The proposed mailings will help certain consumers who have previously complained about regular premium PPI but been rejected to engage with our campaign and consider whether they want to make a new complaint about undisclosed commission before the deadline.”
It follows guidance issued in March last year over how to apply a 2014 Supreme Court decision on PPI claims.
The court found that Susan Plevin, a customer who had not been told of a major commission in her PPI, was entitled to a refund.
Hargreaves Lansdown analyst Sarah Coles said: “150,000 people who have had a PPI claim rejected could be up for a payment after all, while tens of thousands more who didn’t think they had grounds for a complaint could get some money back, after an FCA announcement today.”
“The [Susan Plevin] case related to a policy that had been sold in a single lump sum, so until now, companies could argue that the ‘Plevin rule’ didn’t apply if you’d paid for your PPI in monthly sums.
“However, the FCA has now clarified that it applies regardless of how you paid for the policy. It opens the door to hundreds of thousands of complaints."