Tuesday 2 August 2016 7:30 am

Financial watchdog to set deadline for PPI complaints before the end of June 2019

The financial regulator today said it was moving forward with proposals for a payment protection insurance (PPI) complaints deadline, as it looks to draw a line under the costliest financial scandal ever to hit the UK's banks.

The Financial Conduct Authority (FCA) last year proposed a deadline of spring 2018, however today the watchdog said a deadline would fall before the end of June 2019. 

The regulator said the rule setting the PPI complaints deadline will come into force around six months after it's made, by the end of June 2017. That six month period is to allow the FCA to prepare materials for a consumer communications campaign, aimed at raising awareness of PPI and the new deadline for claims.

According to the regulator, the deadline would then fall two years after the rule comes into force, which means PPI complaints need to be made by the end of June 2019.

Read more: UK bank stocks dip as watchdog announces new PPI deadline

"Putting a deadline on PPI complaints will bring the issue to an orderly conclusion in a way that protects both consumers and market integrity," said FCA chief executive Andrew Bailey.

"We have listened to all the feedback we have received and believe that the steps we are taking are the right ones. We will ensure that our communications campaign will engage with all those who could be affected, particularly vulnerable consumers."

The PPI mis-selling scandal, which involved millions of people claiming compensation for PPI policies they were sold alongside mortgages, loads and credit cards, has cost banks almost £30bn in recent years – and PPI is still the most complained about financial product, according to recent data from the Financial Ombudsman Service.