The Financial Conduct Authority (FCA) has issued a consultation paper on new guidance about the handling of certain regular premium payment protection insurance (PPI) complaints. The proposed guidance clarifies FCA expectations.
In March 2017 the FCA made rules in relation to the Supreme Court judgment in Plevin. That judgment and the rules say that a lender’s failure to disclose at point of sale a large commission payable out of the PPI premium can make the lender’s relationship with the consumer unfair under the Consumer Credit Act.
The FCA’s proposed guidance deals with an uncertainty that has emerged since the rules were made. The guidance clarifies that firms should assess commission disclosures not only at the point of sale but on an on-going basis, and that this should be assessed under its general complaint handling rule.
Jonathan Davidson, Executive Director of Supervision – Retail and Authorisations at the FCA said:
“This consultation provides guidance on how to ensure fair and consistent outcomes for regular premium PPI complaints. It supports our aim of bringing the PPI issue to an orderly conclusion in a way that secures appropriate protection for consumers and enhances the integrity of the UK financial system.”
The consultation closes on 4 September 2018 and FCA will consider the feedback received.
If the FCA decide to proceed, it will issue a policy statement with finalised guidance in late autumn 2018, with an immediate implementation date.
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Consultation paper
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