There’s good news for anyone fed up of cold calls from backroom outfits offering to help you claim compensation for PPI mis-selling (i.e. everyone regardless of whether you ever actually bought it). The Financial Conduct Authority wants to put a deadline on claims, meaning the end of the whole debacle is finally in sight.
The regulator is proposing a two-year cut off, which would come into force after a consultation that probably won’t end until next spring. That means banks would still be paying out for PPI until 2018, having already spent £20.8bn on compensating more than 10 million people.
Nonetheless, the prospect of banks finally drawing a line under the whole saga, both financially and in terms of repairing their still battered reputations, cheered investors right up this morning. Shares in Lloyds, whose £13.4bn provision for PPI compensation is more than double any of its rivals’, rose the most, but RBS and Barclays also outperformed the FTSE 100.
‘A number of those consumers who told us they intended to complain, also said that they had not yet got around to doing so. The open-ended nature of the complaints-led approach appears to contribute to this consumer inertia,’ the FCA said.
It also noted that ‘a high and growing proportion of complaints’ were being made via fee-charging claims management companies. Meanwhile, a rising percentage of claims date back to before 2005 and even into the 90s, meaning evidence is ‘increasingly stale’. Oh, and ‘a significant proportion of complaints made turn out not to have involved a PPI sale.’
All sounds pretty reasonable, but the FCA’s keenness to help the banks move on coincides with its crusading chief executive Martin Wheatley being forced to stand down by chancellor George Osborne. Or perhaps they’d just got fed up of those never ending phone calls.