Britain’s FCA Considers Imposing Cut-Off Date for PPI ComplaintsAmbereen Choudhury and Richard Partington
The U.K. financial markets regulator is considering whether to impose a cut-off date for customer complaints regarding wrongly sold insurance products that cost Britain’s biggest banks billions of pounds.
The Financial Conduct Authority said it plans to collect evidence on whether the “current approach is continuing to meet its objectives of securing appropriate protection” for consumers, it said in a statement on its website on Friday. It will then also consider whether further measures are necessary.
Britain’s four biggest banks have set aside about 22 billion pounds ($33 billion) to compensate consumers after they were wrongly sold payment protection insurance. Lloyds Banking Group Plc alone has taken a provision of 11.3 billion pounds.
Imposing a time limit would be “positive because it draws a line in the sand,” said Shailesh Raikundlia, an analyst at BESI in London. “It certainly feels like the costs could continue to escalate for a while yet otherwise.”
Firms have handled more than 14 million PPI-related consumer complaints since January 2011, upholding more than 70 percent and paying 17.3 billion pounds in compensation, according to the FCA. PPI was sold to borrowers with credit products.