FCA delays PPI rules & deadline announcement

The Financial Conduct Authority (FCA) has today stated that it will no longer be publishing new rules regarding how providers should investigate PPI claims.

The banking regulator also confirmed it will delay announcing when the anticipated PPI deadline will be, instead aiming to make the announcement for both in early 2017.

Weak regulation

The FCA, formerly the Financial Services Authority (FSA), has long been far too weak when it comes to dealing with the major banks.

Weak regulation allowed the PPI scandal to go undetected for years, and little has been done to change bank culture since with weak fines that act as little deterrent.

The banking sector have long been calling for a PPI deadline and their pressure unsurprisingly appeared to have the desired impact on the regulator, who suggested a deadline of 2019 could be imposed.

The fightback

Let’s get one thing straight, the role of any regulator is to protect the rights of the consumer, NOT to protect and cover the wrongdoing of those it regulates.

Consumer champions and companies such as Your Money Claim continue to fight to protect the rights of the tens of millions of consumers affected by the PPI scandal.

Potentially millions of people remain unaware PPI was added to their credit agreements, such were the underhand tactics used by greed driven providers.

The FCA’s own rules clearly state that complaints can be made against financial providers up to three years from when a consumer first realises they had reason to complain.

A two year deadline is therefore, in our opinion, unenforceable as it clearly contradicts its own rules.

Supreme court ruling

A Supreme Court ruling in November 2014 (yes, more than two years ago!) found that the non-disclosure of commission payments to be unfair and in breach of the rules that financial providers must abide by when selling products such as PPI.

The case uncovered that, of the £5,780 paid by a customer towards the PPI policy, 71.8% of it was commission.

The court correctly ruled that had the customer been made aware that only 28.2% of what she was paying was actually for the PPI policy, she may well have decided it was not value for money.

The court stated that the failure or refusal of the financial provider to disclose the commission saw the customer denied the information required to make an informed decision.

Whilst you may think that almost 72% commission to be an extreme example it is simply not, with an average commission taken to be around 69%.

More weak regulation

Given it is over two years since the Supreme Court Ruling you would have expected a regulator to act fast to impose new guidelines for how providers should deal with such complaints.

However, this is the FCA who have consistently shown themselves to be bullied by the banks.

The FCA has gone so far as to suggest that 50% commission is fair, and only a partial refund should be paid.

This is quite simply scandalous, whichever way you look at it.

It is not for a weak regulator to state what level of commission a customer would have been happy to pay, it is for the customer to decide.

The fact that we have yet to see one example of a customer being told about the commissions involved leads us think that not one provider disclosed the information, for obvious reasons.

The fight continues

It appears that the FCA was looking to impose a 2019 PPI deadline and new rules stating that 50% commission is fair.

The announcement that they are delaying making an announcement on these matters is quite possibly because they know they will be challenged legally in the highest court.

One more time…..the role of any regulator is to protect the rights of the consumer, NOT to protect and cover the wrongdoing of those it regulates.

We will continue to fight for a fair outcome to the biggest financial scandal to hit these shores.

FCA delays PPI rules and deadline announcement