Banks are facing millions of new payment protection insurance (PPI) claims over the next two years as the City watchdog uses Arnold Schwarzenegger to arouse public awareness.
The Financial Conduct Authority (FCA) has today launched its £42m advertising campaign encouraging the public to make PPI claims ahead of a 29 August 2019 deadline. The marketing scheme is being funded by 18 firms who reported more than 100,000 complaints against them between August 2009 and August 2015.
Unveiling the advert, which features an animatronic model of Schwarzenegger’s head urging people to “make a decision [on whether to claim PPI,] do it now”, the FCA noted that tens of millions of policies may still be subject to claims by the public.
The City watchdog said that up to 64m PPI policies were sold by lenders, mainly before 2005. Since 2007, around 12m people have received redress and an estimated 24m policies have been the subject of compensation.
The FCA said £27.4bn has been paid out in redress so far, with more PPI pay-outs on the horizon for banks. The firms themselves have set aside more than £40bn to deal with the scandal.
Nick Baxter, chairman of the Professional Financial Claims Association (PFCA), estimates that around 80 per cent of the 64m policies referenced by the FCA were mis-sold. His body also estimates that only around a quarter of policies have so far been compensated, meaning that if all were claimed against the PPI bill for banks would rise to around £100bn.
“Part of the problem with PPI is the fact that a lot of people are blind to the fact that they may have it,” he told City A.M. “The advertising campaign needs to be effective enough to reach those people, to motivate people who are totally blinkered in their thinking, to actually do something. The measure of the success of that campaign will be how far we [break] into the amount that’s owed.”
Andrew Bailey, chief executive of the FCA, said: “Our campaign aims to cut through the noise on PPI. We want to encourage people to decide whether to find out if they had PPI and whether to complain or not.
“Our message, and Arnie’s, is ‘do it now’ and I urge people to make a decision before the deadline on 29 August 2019.”
Meanwhile, from today, consumers can also make claims over undisclosed commission from the sale of PPI. This follows a court ruling, known as Plevin, in March.
The FCA also today announced plans to make it easier for consumers to claim compensation over PPI, which was usually sold with products that people needed to make repayments on, like a loan, credit card or mortgage.
People are now able to submit claims online, the FCA has a new dedicated phone line for PPI, and web pages have also been updated.